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2011Annual Report 2011Building from the Ground Up

www.tclgroup.com

BUILDING FROM THE GROUND UP

Vision Statement

Mission Statement

We are a World Class Group of Companies, committed to leadership in the regional business community and progressive partnering with all our stakeholders through:• A focus on customer satisfaction with quality

products and services;• Superior financial performance and rate of return

to our shareholders;• Growth through diversification and expansion

in our core competency and through nurturing strategic alliances;

• The continuous empowerment of our family of employees participating in a network of mutual support.

To be a World Class Group of Companies providing quality products and services to our customers and generating a superior rate of return to our shareholders through the optimisation of our human, technological and natural resources.

Annual Report 2011

www.tclgroup.com

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ANNUAL REPORT 2011

Contents

Corporate Information 3Notice of Annual Meeting 510-Year Consolidated Financial Review 8Consolidated Financial Summary 9Share and Performance Highlights 10Board of Directors 13About our Board of Directors 14Corporate Governance 16Group Chairman’s Review 17Group Executive Committee 20About our Group Executive Committee 21Group CEO’s Report & Management Discussion 23TCL Subsidiaries - Principal Officers 31Management Proxy Circular 39Directors’ Report 40

Financial StatementsIndependent Auditors’ Report 43Consolidated Statement of Financial Position 44Consolidated Statement of Income 46Consolidated Statement of Comprehensive Income 47Consolidated Statement of Changes in Equity 48Consolidated Statement of Cash Flows 49Notes to the Consolidated Financial Statements 50Proxy Form

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BUILDING FROM THE GROUND UPwww.tclgroup.com

Corporate Information

Board of Directors of Trinidad Cement Limited Mr. Andy J. Bhajan (Chairman) Dr. Rollin BertrandMs. Eutrice CarringtonMr. Bevon Francis Mr. Carlos Hee HoungMr. Jean Michel Allard Dr. Leonard Nurse Mr. George ThomasMr. Brian YoungMr. Luis Miguel Cantú Pinto

Company Secretary Mr. Alan Nobie

Group Chief Executive OfficerDr. Rollin Bertrand

Registered OfficeTrinidad Cement Limited Southern Main Road, Claxton Bay, Trinidad & Tobago, W.I.Phone: (868) 659-0787/88/0800 Fax: (868) 659-0818Website: www.tclgroup.com

Bankers(Local)Republic Bank LimitedHigh Street, San Fernando,Trinidad & Tobago, W.I.

Bankers(Foreign)CITIBANK N.A.111 Wall Street,New York, NY 10043,U.S.A.

Auditors Ernst & Young5/7 Sweet Briar Road,St. Clair,Trinidad & Tobago, W.I.

Registrar & Transfer Agent Trinidad and Tobago Central Depository Limited10th Floor, Nicholas Tower,63-65 Independence Square,Port of Spain,Trinidad and Tobago, W.I.

Sub-RegistrarsBarbados Central Securities Depository Inc.8th Avenue, Belleville,St. Michael, Barbados, W.I.

Jamaica Central Securities Depository40 Harbour Street,Kingston, Jamaica, W.I.

Eastern Caribbean Central Securities Registry LimitedBird Rock, Basseterre,St. Kitts, W.I.

Trust Company (Guyana) Limited230 Camp & South Streets,Georgetown, Guyana, South America.

Stock Exchanges on which the Company is listed:Barbados Stock Exchange8th Avenue, Belleville,St. Michael,Barbados, W.I.

Jamaica Stock Exchange40 Harbour Street,Kingston, Jamaica, W.I.

Trinidad & Tobago Stock Exchange10th Floor, Nicholas Tower,63-65 Independence Square,Port of Spain,Trinidad & Tobago, W.I.

Eastern Caribbean Securities ExchangeBird Rock, Basseterre,St. Kitts, W.I.

Guyana Association of Securities Compa-nies and Intermediaries Inc. Hand in Hand Building,1 Avenue of the Republic,Georgetown,Guyana, South America.

Attorneys-At-LawThe Law Offices of Dr. Claude Denbow S.C.13-15 St. Vincent Street, Port of Spain, Trinidad & Tobago, W.I.

M.G. Daly and Partners 115A Abercromby Street, Port of Spain, Trinidad & Tobago, W.I.

Girwar & DeonarineHarris Court, 17-19 Court Street,San Fernando, Trinidad & Tobago, W.I.

Johnson, Camacho & Singh First Floor, Briar Place, 10 Sweet Briar Road, St. Clair,Port-of-Spain, Trinidad & Tobago, W.I.

Clarke, Gittens, FarmerParker House, Wildey Business Park, Wildey Road,St. Michael, Barbados, W.I.

Hughes, Fields & Stoby62 Hadfield & Cross Streets, Werk-en-rust, Georgetown, Guyana, South America.

Kelsick, Wilkin & Ferdinand P.O. Box 174, Fred Kelsick Building, Independence Square South, Basseterre, St. Kitts, W.I.

Caribbean Juris Chambers Hannah-Waverhouse,P.O. Box 801, The Valley, Anguilla, W.I.

Patterson Mair Hamilton 63-67 Knutsford Boulevard,Kingston 5,Jamaica, W.I.

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ANNUAL REPORT 2011

TraditionBuilding on TraditionFrom the Ground Up

In all parts of the world, cement is a valuable raw material, which has many uses in the construction, transport, agricultural, and civil sectors of a country. Cement and concrete form the building blocks that hold societies together and facilitate convenience and accessibility through infrastructure. For close to sixty years, the TCL Group has been providing cement and ready-mix concrete products to many countries in the Caribbean and in the Americas.

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Notice of Annual Meeting

Notice is hereby given that the ANNUAL MEETING of TRINIDAD CEMENT LIMITED for the year ended 31 December, 2011 will be held at the Training Room, TCL Compound, Southern Main Road, Claxton Bay on Friday 12 October, 2012 at 4:30 p.m. for the transaction of the following business:

A. SPECIAL BUSINESSTo consider and if thought fit, pass the following resolutions: Articles of Continuance:1. Be it resolved that Article 8 of TCL’s Articles of Continuance be amended by deleting the sentence: “The Company

shall have a minimum of three (3) and a maximum of ten (10) directors” and replacing it by the sentence: “The Company shall have a minimum of three (3) and a maximum of twelve (12) directors.”

By-Law No. 1:2. Be it resolved that the amendments to TCL’s By-Law No.1 set out in the attached Appendix 1, effected by resolution

of the Board of Directors on the 2nd day of March, 2012 be and are hereby confirmed in accordance with section 66 of the Company Act Chap. 81:01 of the laws of Trinidad and Tobago.

Abridgement of Term of Directors:3. Be it resolved that the term of office of directors elected at TCL’s Annual General Meetings held in 2010 and 2011

respectively, be and are hereby abridged in the manner set out in the amendment to TCL’s paragraph 4.6.1 of By-Law No.1 set out in the attached Appendix 1.

B. ORDINARY BUSINESS1. To receive and consider the Report of the Directors and the Audited Financial Statements for the financial year

ended 31 December, 2011, with the Report of the Auditors thereon.2. To elect Directors.3. To appoint Auditors and authorise the Directors to fix their remuneration for the ensuing year.4. To transact any other business which may be properly brought before the meeting.

Notes1. Record Date The Directors have fixed Monday 3 September, 2012 as the record date for shareholders entitled to receive notice

of the Annual Meeting. Formal notice of the Meeting will be sent to shareholders on the Register of members as at the close of business on that date. A list of such shareholders will be available for examination by shareholders at the registered office of the Trinidad & Tobago Central Depository, 10th Floor, Nicholas Tower, 63-65 Independence Square, Port of Spain, during usual business hours and at the Annual Meeting.

2. Proxies Members of the Company entitled to attend and vote at the Meeting, are entitled to appoint one or more proxies

to attend and vote instead of them. A proxy need not also be a member. Where a proxy is appointed by a corporate member, the form of proxy should be executed under seal or signed by some officer or attorney duly authorised.

To be valid, the Proxy Form must be completed and deposited at the registered office of The Trinidad & Tobago Central Depository, 10th Floor, Nicholas Tower, 63-65 Independence Square, Port of Spain, not less than 48 hours before the time fixed for holding the Meeting.

BY ORDER OF THE BOARD

ALAN NOBIESECRETARY24 August, 2012

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ANNUAL REPORT 2011

APPENDIX 1

(a) That the existing clause 4.1 be repealed and replaced by the following revised clause 4.1: “4.1 Number The number of directors or the minimum and maximum number of directors of the Company shall be

as set out in the Articles of the Company, of which there shall be no more than five executive directors, provided always that the number of non-executive directors shall at all times exceed the number of executive directors by two. The majority of directors must be persons resident in the West Indies.”

(b) That the existing clause 4.4.2 be repealed and replaced by the following revised clause 4.4.2: “4.4.2 Subject to paragraph 4.6.1 of the by-laws and section 77 of the Act, the directors shall have the

power at any time to appoint any person as a director to fill a casual vacancy, or as an addition to the Board, but so that the total number of directors shall not at any time exceed the maximum number fixed. But any directors so appointed, save as set out in paragraph 4.6.1 of the by-laws, shall hold office only until the next following general meeting of the Company and shall then be eligible for re-election.”

(c) That the existing clause 4.6.1 be repealed and replaced by the following revised clause 4.6.1: “4.6.1 At the annual meeting next following the annual meeting held on the 15th day of July, 2011, the

following shall occur:(a) In the case of directors elected at the annual meeting held on the 15th day of July, 2011, they shall

retire at the close of the second annual meeting following such election;(b) In the case of directors elected at the annual meeting held on the 2nd day of June, 2010, they shall

retire at the close of the second annual meeting following such election;(c) In the case of directors elected at the annual meeting held on the 12th day of May, 2009, and offering

themselves for re-election at the annual meeting next following the annual meeting held on the 15th day of July, 2011, they shall be eligible for re-election until the close of the second annual meeting following such election;

(d) In the case of directors appointed by the board of directors to fill a casual vacancy following the annual meeting held on the 15th day of July, 2011, one-half of such directors shall hold office until the close of the first annual meeting following such election and the other one-half of such directors shall hold office until the close of the second annual meeting following such appointment.

Thereafter, the term of office applicable on election or re-election of all directors shall be two (2) years.”

Notice of Annual Meeting (continued)

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Strong core values can help produce strong communities. This is what the TCL Group strives for in two ways.On the one hand, our quality products help to build homes, schools, roads, jetties, airports, and many other amenities of modern community life.On the other hand, TCL also plays a direct role in helping the communities in which we operate to improve. We assist with UWI scholarships and partner with Habitat for Humanity to build homes for low-income families across the region.

CommunitiesBuilding CommunitiesFrom the Ground Up

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ANNUAL REPORT 2011

UOM 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Group Third Party Revenue TT$m 1,131.80 1,155.70 1,329.90 1,429.80 1,719.00 1,923.00 2,074.40 1,755.80 1,561.10 1,560.86

Operating Profit TT$m 246.70 264.00 304.10 183.90 264.80 349.40 307.20 248.10 (1.20) (167.77)

Group Profit before Taxation TT$m 160.30 173.20 199.30 86.80 160.50 245.70 195.90 84.00 (149.60) (447.84)

Group Profit attributable to Shareholders

TT$m 118.50 121.40 162.30 160.30 145.70 187.80 137.40 95.80 (48.50) (325.32)

Foreign Exchange Earnings

TT $m 176.20 184.00 192.80 162.30 231.80 292.30 362.40 327.70 239.30 271.90

Earnings per Share (EPS) TT$ 0.49 0.50 0.67 0.66 0.60 0.77 0.56 0.39 (0.20) (1.32)

Ordinary Dividend per Share

TT$ 0.18 0.18 0.20 0.15 0.06 0.07 - - - -

Issued Share Capital – Ordinary

TT $m 466.20 466.20 466.20 466.20 466.20 466.20 466.20 466.20 466.20 466.20

Shareholders’ Equity TT$m 765.30 804.40 939.40 1,031.80 1,159.00 1,313.70 1,372.20 1,459.70 1,424.90 1,125.72

Group Equity TT$m 960.80 905.60 1,061.70 1,139.10 1,267.50 1,442.30 1,504.30 1,579.30 1,517.30 1,168.13

Total Assets TT $m 2,320.90 2,239.40 2,394.50 2,948.20 3,230.00 3,621.60 3,994.70 4,034.40 4,120.90 3,953.05

Net Assets per Share TT$ 3.85 3.63 4.25 4.56 5.07 5.77 6.02 6.32 6.07 4.68

Return on Shareholders’ Equity

% 16.20 15.50 18.60 15.50 12.60 14.30 10.00 6.60 (3.40) (28.90)

Share Price (Dec 31) TT$ 5.70 6.00 8.05 10.00 7.01 7.35 4.00 3.85 2.80 1.79

No. of Shares Outstanding (Dec 31)

‘000 249,765 249,765 249,765 249,765 249,765 249,765 249,765 249,765 249,765 249,765

Market Capitalisation (Dec 31)

TT$m 1,423.70 1,498.60 2,010.60 2,497.70 1,750.90 1,835.80 999.10 961.60 699.30 447.08

Total Long Term Debt TT$m 922.10 832.30 848.00 1,181.60 1,253.90 1,395.60 1,444.80 1,359.00 1,674.40 1,678.40

Total Long Term Debt/Equity Ratio

% 96.00 91.90 79.90 103.70 98.90 96.80 96.00 86.10 110.40 143.68

10-year Consolidated Financial Review

9


Consolidated Financial SummaryTT

$

2007 2008 20090.0

0.4

0.8

- 0.4

- 0.8

- 1.2

2010

- 1.4

2011

TT$m

2007 2008 2009 2010 20110

500

1500

2500

0

100

200

TT$m

2007 2008 2009 2010 2011

-100

-200

-300

-350

TT$m

2007 2008 2009 2010 20110

1000

3000

5000

Earnings Per Share - 2007 - 2011

Group Third Party Revenue - 2007 - 2011

Group Profit Attributable to Shareholders - 2007 - 2011

Total Assets - 2007 - 2011

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ANNUAL REPORT 2011

Share & Performance Highlights

Trading Volumes Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11T’dad TCL 201,938 238,875 332,665 58,188 137,078 39,256 418,492 RML - - - - - - - BSE TCL - - - - 2,500 1,000 - J’ca TCL - - 1,000 - 100 92,000 339,012 CCCL 1,692,013 915,301 853,637 257,245 144,361 617,856 1,528,496 ECSE TCL - - - - - - -

Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 TOTALT’dad TCL 309,457 244,880 251,160 473,547 170,881 2,876,417 RML - - - - - - BSE TCL - - - - - 3,500 J’ca TCL 500 137,071 - - - 569,683 CCCL 834,704 5,264,349 3,494,167 3,002,713 1,478,233 20,083,075 ECSE TCL - - - - - -

Jan-11Feb-11

Mar-11Apr-11

May-11

Jun-11Jul-11

Aug-11

Sep-11

Oct-11Nov-11

Dec-11

2.59 2.61 2.62 2.65 2.50 2.15 1.80 1.75 2.17 2.16 1.80 1.79

31.35 31.35 31.35 31.35 31.35 31.35 31.35 31.35 31.35 31.35 31.35 31.35

8.81 8.76 8.72 8.98 9.26 9.50 9.65 9.76 9.89 9.90 10.05 10.13

05101520253035

Jan-11Feb-11

Mar-11Apr-11

May-11

Jun-11Jul-11

Aug-11

Sep-11Oct-11

Nov-11

Dec-11

Share Price

T&T Stock Exchange (TT$)

TCL RML Index/100

53.00 53.00 53.00 53.00

30.0024.00 20.40 20.00 18.31 18.31 18.31 18.31

2.51 2.78 2.82 2.68 2.81 1.95 1.95 2.01 1.89 2.26 3.04 3.00

85.07 85.81 86.53 89.23 88.65 88.5890.80 93.53 91.73 95.27

96.13 95.30

0

20

40

60

80

100

120

Share Price

Jamaica Stock Exchange (J$)

TCL CCCL Index/1000

3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40

0.14 0.15 0.15 0.15 0.15 0.14 0.14 0.14 0.14 0.14 0.14 0.140.500

1.001.502.002.503.003.504.00

Share Price

Eastern Caribbean Stock Exchange (EC$)

TCL Index/1000

Jan-11Feb-11

Mar-11Apr-11

May-11

Jun-11Jul-11

Aug-11

Sep-11Oct-11

Nov-11

Dec-11Jan-11

Feb-11Mar-11

Apr-11May-11

Jun-11Jul-11

Aug-11

Sep-11Oct-11

Nov-11

Dec-11

0.80 0.80 0.80 0.801.00

0.80 0.80 0.80 0.80 0.80 0.80 0.80

3.35 3.36 3.353.64

3.36 3.33 3.31 3.29 3.30 3.29 3.29 3.27

00.51.001.502.002.503.003.504.00

Share Price

Barbados Stock Exchange (BD$)

TCL Index/1000

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Share & Performance Highlights (continued)

Group Performance Highlights 2011 2010 % ChangeIncome Statement Group Third Party Revenue $m 1,560.86 1,561.1 0Group (Loss)/Profit attributable to Shareholders $m (325.32) (48.5) (570.8)Foreign Exchange Earnings $m 271.9 239.3 13.6

Balance SheetTotal Assets $m 3,953.0 4,120.9 (4.1)Shareholders’ Equity $m 1,125.7 1,424.9 (21.0)Net Assets per Share $ 4.7 6.1 (23.0)Total Long Term Debt $m 1,678.4 1,674.4 (4.0)Total Long Term Debt to Equity Ratio % 143.7 110.4 (30.2)

Operational HighlightsTCL Clinker production ‘000 tonnes 656.4 622.4 5.5 Cement sales - Local “ 535.2 548.4 (2.4) Cement sales - Export “ 292.2 245.0 19.3 Cement sales - Total “ 827.4 793.4 4.3CCCL Clinker production ‘000 tonnes 628.3 629.4 (0.2) Cement sales - Local “ 553.1 531.6 4.0 Cement sales - Export “ 216.8 195.2 11.1 Cement sales - Total “ 769.9 726.8 5.9ACCL Clinker production ‘000 tonnes 184.1 194.1 (5.2) Cement sales - Local “ 110.4 112.5 (1.9) Cement sales - Export “ 112.2 127.8 (12.2) Cement sales - Total “ 222.6 240.3 (7.4)TPL Paper sack production millions 31.8 29.7 7.1 Paper sack sales “ 32.8 31.6 3.8TPM Sling production thousands 393.5 375.0 4.9 Sling sales “ 375.4 346.5 8.3 Jumbo bag sales “ 33.5 79.4 (57.8)RML Group Concrete sales – T&T, Barbados ‘000m3 108.6 119.8 (9.3)JGQ Gypsum sales ‘000 tonnes 79.5 209.7 (62.1)

Category % DistributionIndividuals 24.30%Sierra Trading 20.00%Baleno Holding 8.21%Unit Trust 4.49%NIB 10.16%Banks / Pension Funds 25.76%Insurance Companies 2.85%Other Foreign Investors 4.23%Total 100.00%

Category % DistributionIndividuals 24.30%Sierra Trading 20.00%Baleno Holding 8.21%Unit Trust 4.49%NIB 10.16%Banks / Pension Funds 25.76%Insurance Companies 2.85%Other Foreign Investors 4.23%Total 100.00%

Distribution of Shareholding

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ANNUAL REPORT 2011

Urbanity

Just as cities are imperative for a country’s economic growth, so too are cement and concrete for the growth of these cities. Buildings, roads, parking lots, schools and restaurants all employ cement as both a literal and figurative building block. With an assurance of quality and safety in hand, the TCL Group is devoted to aiding in the construction of infrastructure that will stand the test of time. The TCL Group continues to provide the Caribbean region with the highest quality of infrastructure.

Building UrbanityFrom the Ground Up

Dr. Leonard Nurse Director, Trinidad

Cement Limited

www.tclgroup.com


Board of Directors

13

Eutrice Carrington Chairman, Readymix (West

Indies) Limited; Director, Trinidad Cement

Limited

Andy J. Bhajan Chairman, Trinidad Cement Limited

Dr. Rollin Bertrand Group Chief Executive Officer; Director,

Trinidad Cement Limited; Caribbean Cement Company Limited; Arawak

Cement Company Limited; TCL Packaging Limited; TCL Ponsa Manufacturing;

Readymix (West Indies) Limited; TCL Trading Limited; TCL Guyana Incorporated; TCL Leasing Limited; TCL Service Limited; TCL (Nevis) Limited.

Carlos Hee Houng Chairman, TCL Trading Limited; Director, Trinidad

Cement Limited

Dr. Leonard Nurse Director, Trinidad

Cement Limited

Brian Young Chairman, Caribbean

Cement Company Limited; Director, Trinidad Cement Limited

Bevon Francis Director,

Caribbean Cement Company Limited

Jean Michel Allard Director, Trinidad Cement Limited

George Thomas Director, Trinidad

Cement Limited

Luis Miguel Cantú Pinto Director, Trinidad

Cement Limited

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ANNUAL REPORT 2011

About our Board of Directors

Mr. Andy J. Bhajan, Chairman Mr. Andy J. Bhajan was first appointed a Director of TCL in 1987. He was subsequently appointed Group Chairman in October 1995 and served in that capacity until he retired in March 2003. He was re-appointed a Director and Group Chairman of the TCL Board of Directors in October 2005 and continues to serve in that capacity. Mr. Bhajan is an Attorney-at-Law with considerable experience in business and in law and conducts a private practice.

Dr. Rollin Bertrand, Group CEOGroup Chief Executive Officer: Director, Trinidad Cement Limited; Caribbean Cement Company Limited, Arawak Cement Company Limited, TCL Packaging Limited, TCL Ponsa Manufacturing, Readymix (West Indies) Limited, TCL Trading Limited, TCL Guyana Incorporated, TCL Leasing Limited, TCL Service Limited, TCL (Nevis) LimitedDr. Rollin Bertrand is the Chief Executive Officer of the TCL Group. He is Chairman of the Board of Trustees of the Caribbean Court of Justice Trust Fund and Chairman of Trinidad Aggregate Products Limited. He was formerly the General Manager of Arawak Cement Company Limited (1994–1998), President of the Association of Cement Producers for Latin America and the Caribbean, President of the Caribbean Association of Industry and Commerce (2003–2005), Chairman of the Water and Sewerage Authority (2006–2008) and a Director of the Trinidad and Tobago Stock Exchange (2002–2011).Dr. Bertrand obtained a BSc (Sp. Hons. 1979) Degree and PhD in Geology (1984) from the University of the West Indies, Mona, Jamaica as well as an Executive Masters Degree in Business Administration (EMBA 1993) from the University of the West Indies, St. Augustine. He was among fifty distinguished alumni who were recognised at UWI’s 50th Anniversary Celebrations for excellence in career achievements.

Ms. Eutrice CarringtonChairman, Readymix (West Indies) Limited; Director, Trinidad Cement LimitedMs. Eutrice Carrington is the Executive Director at the Trinidad and Tobago Unit Trust Corporation, the largest mutual fund service provider in Trinidad and Tobago and the Caribbean region. She holds a BSc (honours) and an MSc in Economics. Her career in investments spans a period of over twenty years and during her tenure, she has held positions of Chief Executive Officer - Financial Services, Executive Manager - Asset Management, Manager

- Investment Management Services, Portfolio Manager and Research and Security Analyst. Ms. Carrington also worked as a Policy Analyst II in the Ministry of the Economy and spent several years in the domestic banking sector.Ms. Carrington has served as Secretary of the Economics Association of Trinidad and Tobago. She was a member of the Technical Committee appointed by the Cabinet of Trinidad and Tobago to assist in the formulation of Mutual Fund Legislation.

Mr. Carlos Hee Houng Chairman, TCL Trading Limited; Director, Trinidad Cement LimitedMr. Carlos Hee Houng is a Chemical Engineer with over forty-three years’ experience in the energy sector. He is regarded as one of the pioneers in the development of the gas-based industries in Trinidad and Tobago. He was a member of the Government of Trinidad and Tobago team responsible for the acquisition and expansion of Trinidad Cement Limited in 1975–1976. Mr. Hee Houng is involved in sports, culture and community work and was honoured by the UWI Faculty of Engineering at its 25th anniversary for outstanding contribution to national development. He was also recognised among fifty distinguished alumni at UWI’s 50th anniversary celebrations.

Dr. Leonard NurseDirector, Trinidad Cement LimitedDr. Leonard Nurse is a Senior Lecturer at the Centre for Resource Management and Environmental Studies at the University of the West Indies, Cave Hill Campus, Barbados and an Associate of the Centre for Coastal Engineering and Management, UWI, St. Augustine. He graduated with a PhD from McGill University, and is currently Chairman of Barbados National Oil Group of Companies and a Director of the Barbados Cane Industry Corporation. Dr. Nurse is also the Chairman, Board of Governors of the Caribbean Community Climate Change Centre, which is headquartered in Belize.In 2000, Dr. Nurse was awarded the Certificate of Merit by the Future Centre for outstanding work in support of preservation of natural reefs, and in 2001 he was awarded the Barbados Centennial Honours followed by the Governor-General’s Award for the Environment. He also received Barbados’ second highest national award, the Companion of Honour of Barbados, in 2007. He is a member of United Nations Intergovernmental Panel on Climate Change, which was awarded a Nobel Prize in 2007 for its scientific research on climate change.

15


Mr. Brian Young Chairman, Caribbean Cement Company Limited; Director, Trinidad Cement LimitedMr. Brian Young is a Chartered Accountant and had been with PriceWaterhouse for over thirty years before retiring as a senior partner in 1995. Since then, he has served as Interim Executive Chairman of the National Water Commission (Jamaica). He is currently Chairman of the Caribbean Cement Company Limited (based in Jamaica) and serves on the Board of Directors of the Neal and Massy Group, Bermudez Group Limited (based in Trinidad). He is also on the Board of Directors of Neal and Massy Holdings Jamaica Limited, Jamaica Biscuit Company Limited, Trade Winds Limited (Jamaica) and CRIF NM Credit Assure Limited.

Mr. Bevon FrancisDirector, Trinidad Cement Limited; Director, Caribbean Cement Company LimitedMr. Bevon Francis was appointed to TCL’s Board of Directors on 3 December, 2010. He also serves as a Director on the Board of Caribbean Cement Company Limited (CCCL). Mr. Francis graduated from the University of the West Indies, St. Augustine with a degree in Electrical Engineering and subsequently attained a Diploma in Management Studies from the University of the West Indies, Mona and an MBA (Finance) from the University of Manchester and the University of Wales. Mr. Francis has held the position of Senior Executive Manager at several manufacturing companies in Jamaica and is currently the Executive Chairman of Peak Bottling Company Limited and Deputy Chairman on the Board of IGL Ltd.

Mr. Jean Michel AllardDirector, Trinidad Cement Limited Mr. Jean Michel Allard is an independent expert in the cement industry. He was appointed to the Board of Directors of TCL on 29 March, 2012. Mr. Allard gained extensive experience during his forty-year tenure with Vicat Group, an International Cement Organisation. He served as the Deputy CEO for twenty-two years and prior to that appointment, he held several managerial positions within the company. His ancillary assignments included membership on the Board of Directors of Syndicat Français Industrie Ciment (SFIC) and Chairman of the National Commission on Safety for the French Cement Profession.

Mr. George Thomas Director, Trinidad Cement LimitedMr. George Thomas was appointed to the Board of Directors on 29 March, 2012. He has over forty-three years’ experience within the cement and building materials sector. In 1968, Mr. Thomas graduated from the Indian Institute of Technology (IIT), Bombay, with a Master’s Degree in Structural Engineering. He is also certified in the areas of project management, communications, human resources development, industrial economics and business management.Mr. Thomas started his cement industry-related career at the Cement Research Institute of India (now the National Council for Cement and Building Materials). Subsequently, he worked for the Holcim Group (headquartered in Switzerland), Rambøll (the largest Nordic consulting firm headquartered in Denmark) and at the International Finance Corporation (IFC) of the World Bank Group in Washington DC as their Principal Industry Specialist. He has worked in over sixty countries spread over Asia, Europe, Africa, North and South Americas. He has interacted with most of the major cement sector-specific multinational groups and bilateral/multilateral lending institutions.Mr. Thomas currently serves as an independent Director on the Boards of Zuari Cement Limited (India), Asia Cement Company (Thailand), and Fuping Cement Company (China). He has also served as independent Director on the Boards of Obajana Cement Limited of Dangote Group (Nigeria) and Austroplan Engineers (Austria).Prior to joining the Board of TCL, Mr. Thomas attended the Directors’ Education and Accreditation Programme (DEAP) organised by the Institute of Chartered Secretaries and Administrators (ICSA) and the Eastern Caribbean Securities Exchange (ECSE).

Mr. Luis Miguel Cantú PintoDirector, Trinidad Cement LimitedMr. Luis Miguel Cantú Pinto has been Cemex’s nominee on the board since 30 April, 2010. His term ends at the next annual meeting and Cemex has proposed Mr. Alejandro Alberto Ramirez Cantu as his successor.

About our Board of Directors (continued)

16

ANNUAL REPORT 2011

TCL Group – Board Sub-Committees

Governance CommitteeMembers: Mr. A. J. Bhajan (Chairman) Mr. B. Young

Audit CommitteeMembers: Mr. B. Young (Chairman) Ms. E. Carrington Mr. J.M. Allard Mr. C. Hee Houng

Finance CommitteeMembers: Ms. E. Carrington (Chairman) Dr. R. Bertrand (Group CEO) Mr. L. Parmasar (Group Finance Manager) Mr. B. Young Mr. G. Thomas

Human Resource CommitteeMembers: Ms. E. Carrington (Chairman) Dr. R. Bertrand (Group CEO) Mr. D. Caesar (Group Human Resource Manager) Board Marketing CommitteeMembers: Mr. C. Hee Houng (Chairman) Dr. R. Bertrand (Group CEO) Mr. E. Daniel (General Manager – International Business & Marketing) Board Technical CommitteeMembers: Dr. R. Bertrand (Chairman) Mr. G. Thomas Mr. J.M. Allard Mr. J. Maharaj Mr. S. Bachew Mr. F.L.A. Haynes Mr. R. Greene Mr. H. Dipnarine Mr. K. Wiltshire Mr. D. Sutherland

TCL Board Operating CommitteeMembers: Mr. H.N. Hosein (Chairman) Dr. R. Bertrand (Group CEO) Mr. L. Parmasar (Group Finance Manager) Mr. A. Ramcharan

Corporate Governance

17


Group Chairman’s Review

The year 2011 was one of the most difficult years in the recent history of the TCL Group. It followed a challenging 2010, in which weak economic conditions in global and regional markets led to declining cement sales and production, resulting in the Group suffering its first loss since 1987.

meant that the ability of Group companies to acquire spare parts for maintenance and to purchase critical production inputs on a timely basis was impaired, resulting in less than optimal production availabilities and efficiencies. The stringent liquidity situation eased somewhat at the end of the second quarter 2012 with the execution of two sales contracts, which resulted in advance payments of US$12 million to the Group.While Group third party revenue remained unchanged from the prior year at TT$1.6 billion, Earnings before Taxation and Depreciation declined by 50%, largely due to a 21% increase in fuel and electricity expenses and a 14% increase in the cost of raw material and consumables. More significantly, however, the Group incurred debt restructuring expenses of $103.2 million and impairment charges and write-offs of $79.4 million. Along with finance costs of $188.0 million, these were the major contributors to the Loss for the year from Continuing Operations of $384.4 million. A more detailed analysis of the Group’s financial performance is provided in the Group CEO’s Report and Management Discussion, which follows on

Andy J. Bhajan - Group Chairman

In 2011, domestic sales volumes remained relatively stagnant as regional economic growth rates continued to be anaemic. Faced with higher production costs, particularly higher energy costs as well as with constrained revenues, high debt service obligations and weak market conditions, Trinidad Cement Limited (TCL) on 14 January, 2011 declared a moratorium on debt service payments due by all member companies of the Group. The moratorium was declared at the commencement of discussions with a majority of the Group’s lenders aimed at restructuring the debt portfolio in order to ensure adequate liquidity and allow for continuation of business operations. Unfortunately, the process of finalisation of the terms of the debt restructuring was somewhat protracted, with the agreements being signed on 10 May, 2012, and closure being formally certified on 15 June, 2012, more than a year after the commencement of discussions.During this period the performance of the Group was negatively affected as credit lines were frozen and access to fresh working capital was severely constrained. This

18

ANNUAL REPORT 2011

Group Chairman’s Review (continued)

page 23. Regrettably, the Board is unable to approve the payment of a dividend in light of the Group’s financial performance for 2011.It must be pointed out that the experience of the TCL Group is not unique for companies operating in the international building materials sector. The global cement majors have also had to chart a course through turbulent economic waters. They have had to adopt strategies similar to the ones being pursued by the TCL Group to ensure survival and sustainability. Companies have adopted programmes involving debt restructuring, manpower rationalisation, asset divestment and plant closures. These are processes that are ongoing since growth remains elusive in the global economy, particularly for the developed countries.

Our Strategic Intent—the Way ForwardIn spite of the recent challenges, the TCL Group remains the premier regional manufacturer and marketer of cement. Over a period spanning some 50 years, the Group has become a veritable West Indian institution, with operations spreading from Jamaica in the north to Guyana in the south, servicing the needs of millions of people in thousands of communities across the Caricom region. The major strategic thrust for the Group encompasses four main elements:• Expansion and growth in the Group’s core business

and closely related activities- new products / services- market penetration (existing/new markets)- clinker capacity expansion and increased

operational efficiencies (from 1.8 million tonnes in 2010 to 2.5 million tonnes by 2014)

• Co-ordinated extension of the Group’s business domain in the region, inclusive of the Spanish and French-speaking territories

• Structured development of the core competency requirements for existing and new businesses

• Harnessing information technology as an enabler for organisational transformation

Our Process and ProgressWhereas in the immediate future the emphasis is upon consolidation, the Board and management has not lost sight of the strategic objectives outlined above. In this regard, there are initiatives currently being pursued to advance these objectives. Having completed the debt restructuring, the development of new markets and the adoption of cost reduction strategies continue to be areas of focus. Progress has been made on each of these fronts. Regarding new market entry, there has been success in exports from Carib Cement ( CCCL) into Haiti and from TCL into Brazil. Arawak Cement also made initial shipments into the French West Indies, with regular shipments to follow. During the second quarter of 2012, TCL was able to commence shipments on a contractual basis into Venezuela to supply cement to a dam construction project in that country. Other opportunities are being pursued, which will bear fruit in the future.Regarding cost reduction strategies, several initiatives are being pursued across the Group, which are aimed at ensuring that operational costs fall within the range of acceptable industry benchmarks. Accordingly, the efficiency and cost of energy utilisation and the cost-effective use of technology have been areas of focus. Additionally, manpower levels are under review at all companies in an effort to reduce unit labour cost. In that context, the Board acknowledges the sterling efforts of TCL’s management in the face of an extended strike in not acceding to unreasonable wage demands from the representative trade union. The strike commenced on 27 February, 2012 and ended on 26 May, 2012, with the matter being referred for adjudication by the Industrial Court of Trinidad and Tobago. While it has had a negative impact on the Group’s financial performance, the strike also yielded some valuable insights into opportunities for achieving improvements in productivity and efficiency of business processes. Consequently, a programme of restructuring is underway, which is intended to make the Group more cost competitive.We are of the view that with new markets being entered, and arrangements for new strategic alliances being completed, as well as the reformulation of our strategic thrust, the TCL Group will emerge as a stronger and more profitable enterprise.

19


Group Chairman’s Review (continued)

Board ChangesNew Directors and ResignationsEffective 29 March, 2012 two new Directors joined the TCL Board in compliance with the terms of the debt restructuring agreement. Messrs. Jean Michel Allard and George Thomas were appointed in accordance with Clause 4.4.2 of By-Law No 1 to fill casual vacancies created by the resignations of Dr. Leonard Nurse and Mr. Jeffrey Mc Farlane to facilitate successful completion of the debt restructuring. Messrs. Allard and Thomas have extensive cement industry experience and relevant biographical data on them is provided on page 15 of this report. Subsequently, Dr. Nurse was reappointed to the Board on 3 August, 2012 to fill a casual vacancy arising from the resignation of Dr. Aleem Mohammed effective 31 July, 2012. Dr. Mohammed had indicated that the demands of his business made it difficult for him to continue serving as a TCL Director. We thank him sincerely for his period of service with the Group and wish him well in his future endeavours. Co-incidentally, the term of Mr. Luis Miguel Cantú Pinto expires at the end of this Annual Meeting and he has not offered himself for re-election. We thank Mr. Cantú Pinto for his service as a Director. CEMEX has nominated Mr. Alejandro Alberto Ramirez Cantu as his replacement. Mr. Ramirez Cantu has a wealth of international experience, mainly Asia, the Caribbean and South America, in the management of business units and the development and implementation of operative and corporate stategy.

Proposed Board ChangesAt the Annual Meeting on12 October, 2012 shareholder approval is being sought for an expansion of the number of Directors on the TCL Board from the existing ten to

twelve and for the shortening of Directors’ terms of office from the current three years to two years with appropriate provisions for rotation. These amendments are intended to fulfill obligations arising under the debt restructuring agreement. The specific resolutions to be adopted by shareholders to implement these structural changes are detailed in the enclosed proxy form.

AcknowledgementsThe challenges of 2011 carried over into 2012, as the Group continued to experience the effects of a shortage of working capital and was impacted by the strike at TCL, which lasted for 90 days. Consequently, the Group’s performance for the first half of the year was disappointing. Nevertheless, with the conclusion of the debt restructuring, there is every expectation of a performance turnaround in the second half of 2012, as this will enable a re-focusing of attention upon the business, the return to full production and the resumption of exports at TCL, together with improvement in the Group’s working capital situation.I wish to thank my fellow Directors, the Group CEO and the Management, and all employees for their dedication to duty in very difficult circumstances. I also wish to thank our loyal customers for their support, our shareholders for their patience and all of our stakeholders for their continued understanding.

Andy J. BhajanGroup Chairman

20

ANNUAL REPORT 2011

Group Executive Committee

Jinda Maharaj Group Manufacturing Development

Manager, TCL Group

Dr. Rollin Betrand Chief Executive Officer,

TCL Group

Rupert Greene General Manager,

Arawak Cement Company Limited

David Caesar Group Human Resource Manager,

TCL Group

Derrick Isaac General Manager,

TCL Packaging Limited, TCL Ponsa Manufacturing

Limited

Egwin Daniel General Manager - International

Business and Marketing, TCL Group

Satnarine Bachew General Manager,

Trinidad Cement Limited

Alan Nobie Manager -

Investor Relations and Corporate

Communications/Company Secretary

Lincoln Parmasar Group Finance Manager,

TCL Group

F.L. Anthony Haynes General Manager,

Caribbean Cement Company Limited

Manan Deo General Manager,

Readymix (W.I.) Limited

21


About our Group Executive Committee

Dr. Rollin BertrandDr. Rollin Bertrand is the Chief Executive Officer of the TCL Group. He is Chairman of the Board of Trustees of the Caribbean Court of Justice Trust Fund and Chairman of Trinidad Aggregate Products Limited. He was formerly the General Manager of Arawak Cement Company Limited (1994–1998), President of the Association of Cement Producers for Latin America and the Caribbean, President of the Caribbean Association of Industry and Commerce (2003–2005) and Chairman of the Water and Sewerage Authority (2006–2008) and a Director of the Trinidad and Tobago Stock Exchange (2002–2011).Dr. Bertrand obtained a BSc (Sp. Hons. 1979) Degree and PhD in Geology (1984) from the University of the West Indies, Mona, Jamaica as well as an Executive Master’s Degree in Business Administration (EMBA 1993) from the University of the West Indies, St. Augustine. He was among fifty distinguished alumni who were recognised at UWI’s 50th Anniversary Celebrations, for excellence in career achievements.

Mr. Jinda Maharaj Mr. Jinda Maharaj was appointed Group Manufacturing Development Manager on 1 May, 2012. He was formerly the Group Energy Optimisation Manager, a position he held from 1 October, 2010. Mr. Maharaj possesses a wealth of knowledge and experience, having been with the TCL Group for more than twenty years. He has held various positions throughout the Group, including Engineering Services Manager, Materials Manager, Production Manager, Operations Manager (all at Trinidad Cement Limited) as well as General Manager and Operations Manager at Arawak Cement Company Limited and, Operations Manager at Caribbean Cement Company Limited.Mr. Maharaj holds a BSc in Mechanical Engineering and an MSc in Production Engineering and Management, both from the University of the West Indies, St. Augustine.

Mr. Rupert GreeneMr. Rupert Greene assumed the position of General Manager of Arawak Cement Company Limited in June 2008. Mr. Greene has been a part of the Arawak family since April 1995, when he joined the company as an Accountant. He was then promoted to Finance Manager in July 1997, a position he held for eleven years. He has several years of accounting experience, having held various senior positions before joining Arawak Cement Company Limited.

Mr. Greene graduated with honours from the University of the West Indies with a Bachelor’s Degree in Accounting.

Mr. David Caesar Mr. David Caesar joined the TCL Group on 1 March, 2010 in the position of Group Human Resource Manager. He possesses over fifteen years’ experience in the Human Resource field, enabling him to bring a wealth of knowledge and expertise to the Group, particularly in the areas of organisational change, cultural transformation and performance management.Mr. Caesar holds an MSc in Organisational Development from the American University, Washington DC, a Post-Graduate Diploma in Business Management from the Heriot-Watt University, Scotland and a BSc in Mathematics and Economics from the University of the West Indies.

Mr. Derrick IsaacMr. Derrick Isaac, General Manager of TCL Packaging Limited & TCL Ponsa Manufacturing Limited has been with the Group for over sixteen years and has held managerial positions at Caribbean Cement Company Limited, Jamaica and Trinidad Cement Limited, Trinidad. He is a Fellow of the Chartered Association of Certified Accountants (FCCA) and a member of the Institute of Chartered Accountants of Trinidad and Tobago (ICATT). He holds a Masters of Business Administration from the University of New Orleans, and is also an Associate Member of the Association of Certified Fraud Examiners (ACFE).

22

ANNUAL REPORT 2011

Mr. Satnarine BachewMr. Satnarine Bachew, General Manager of Trinidad Cement Limited, has been with the TCL Group for the past twenty-three years. He has held various positions such as Quarry Foreman, Process Engineer, Quarry Manager, Production Manager and Marketing Manager (all at Trinidad Cement Limited) as well as Operations Manager and General Manager at Arawak Cement Company Limited, Barbados. He holds a BSc in Geology and Mathematics from the University of the West Indies, Jamaica and is a graduate of the Master’s programme at Dalhouse University, Nova Scotia, Canada. He also holds a Masters in Business Administration from the Arthur Lok Jack School of Business, Trinidad.

Mr. Egwin Daniel Mr. Egwin Daniel, TCL’s General Manager (International Business and Marketing), has extensive international marketing and financial experience, having worked in these fields in Canada, USA and throughout the Caribbean for nineteen years, seven of which were spent in the French and Spanish Caribbean, providing senior management expertise in the international money markets and distribution. He holds an MBA from the University of Concordia, Canada and a BSc from Mc Gill University, Canada. Currently, he is finalising requisites for membership in the USA National Association of Securities Dealers (NASD) and the USA National Futures Association (NFA).

Mr. Alan NobieMr. Alan Nobie, Manager, Investor Relations and Corporate Communications at the TCL Group, is also Company Secretary of Trinidad Cement Limited and TCL Guyana Inc. He has been with the TCL Group since 1990. He is a fellow member of the Chartered Association of Certified Accountants (FCCA), and the Institute of Chartered Accountants of Trinidad and Tobago (ICATT). Mr. Nobie obtained a BSc in Management Studies as well as an Executive MBA from the University of the West Indies. Mr. Nobie is a former Vice-President of Trade and Trade Related Matters of the South Trinidad Chamber of Industry and Commerce.

Mr. F.L. Anthony Haynes Mr. F.L. Anthony Haynes was appointed General Manager of Caribbean Cement Company Limited (CCCL), Jamaica in January 2002. Prior to this, he held the post of General Manager at Trinidad Cement Limited, Claxton Bay, during the period 1998 to 1999. Mr. Haynes possesses extensive experience in the manufacturing and energy industries. He holds a BSc in Electrical and Electronic engineering from London University, England, and was a National Scholarship winner in 1972.

Mr. Lincoln ParmasarMr. Lincoln Parmasar assumed the position of Group Finance Manager from 1 August, 2009. He has been with the TCL Group since April 1995, holding a number of senior positions. Mr. Parmasar has many years of experience in the field of accounting, having previously worked at a public auditing firm and in the energy sector. He is a Fellow of the Chartered Association of Certified Accountants (FCCA) and a member of the Institute of Chartered Accountants of Trinidad and Tobago (ICATT), as well as a graduate (Upper Second Class Honours) of the University of the West Indies with a Bachelor’s Degree in Accounting.

Mr. Manan DeoMr. Manan Deo was appointed General Manager, Readymix (West Indies) Limited in 2005. He joined the TCL Group as Marketing Manager of TCL Packaging Limited in 1995 and was appointed the General Manager of both TCL Packaging Limited and TCL Ponsa Manufacturing Limited in October 1997. During his tenure, both TPL and TPM won “Exporter of the Year” awards in their respective categories, particularly as a result of market breakthroughs into Columbia, Venezuela and most significantly, Cuba. Mr. Deo is fluent in Spanish and holds a BSc in Management Studies from UWI, St. Augustine, as well as an Executive MBA (Distinction) with an emphasis on International Marketing. He is currently the Chairman of the Presbyterian Primary Schools Board of Education and the Vice-Chairman of the Board of the JC McDonald Home for the Aged.

About our Group Executive Committee (continued)

23


Group CEO’s Report & Management Discussion

1.0 Health Safety and Environment (HSE)Occupational Safety and Health (OSH) Management The Group recorded a total of seven ‘direct employees’ and four ‘contractor’ lost-time accidents (LTAs) during 2011, an overall increase of one LTA over the total for 2010; however, there was a 40% improvement in the accident severity in terms of the significant reduction in the number of days lost resulting from the accidents.

as matrices were developed for TCL and RML while assessments have been completed at TPL and TPM. The 8th Group HSE Forum was held in Trinidad, and key HSE personnel and Operations personnel from all the companies in the Group participated in analysing past HSE performance and recommending improvement strategies and programmes.Following submission of the Group’s Annual Monitoring Report (AMR) for OSH, Environment, Social, Security & Sustainability to the International Finance Corporation, the latter conducted its HSE surveillance visit and expressed overall satisfaction with performance. During the year, the findings of an assessment of the Behaviour Accident Prevention Programme (BAPP) conducted by the Group HSE Manager were circulated for implementation as applicable. All the companies in the Programme—ACCL, TPL, TPM and RML—achieved a good observation rate based on the effectiveness indicator of the number of observations made per trained observer, with

Dr. Rollin Bertrand - Chief Executive Officer

The eleven LTAs for 2011 consisted of: 4 at Trinidad Cement Limited (TCL), 3 at Readymix (West Indies) Limited (RML), 2 at Arawak Cement Company Limited (ACCL), and 2 at Caribbean Cement Company Limited (CCCL).TCL Ponsa Manufacturing (TPM) maintained its record of achieving over four consecutive years without an LTA, and TCL Packaging Ltd. (TPL) for over three consecutive years without an LTA. In addition, TPL received recognition in the category of ‘Small and Medium Companies’ at the American Chamber of Trinidad and Tobago’s HSE Excellence Awards, for 2011. I take this opportunity to commend the employees of both subsidiaries for these achievements. The Group continues to implement its holistic integrated approach to OSH Management which involves building and maintaining robust OSH systems assessed via a proactive suite of OSH Key Performance Indicators (KPIs), risk management and promotion of a positive HSE culture. Implementation of OSH Risk Assessment for the Trinidad-based subsidiaries, advanced

24

ANNUAL REPORT 2011

Group CEO’s Report (continued)

TPL and TPM registering the best performance on this indicator. The major challenges of 2011 were maintaining the enthusiasm level for the programme and the closing out of the identified barriers in a timely manner, due mainly to the industrial and financial climate at the time. Nonetheless, the efforts of the BAPP facilitators at all companies were commendable as good observation rates, on-going training and recognition sessions and BAPP promotion (e.g. via a BAPP Newsletter) were conducted at the respective companies.

Environmental ManagementISO 14001 EMS Registrar Surveillance Audits were conducted at CCCL and ACCL with each company maintaining its Environmental Management System certification. An audit was not undertaken at TCL as an Integrated Environmental and Quality Management Systems Audit was conducted by the Registrar TTBS in November 2010. Current certification for all companies will expire during 2013. Plant upgrades requiring CAPEX to further improve the environmental performance of ISO 14001 EMS-certified companies remain a challenge. Concerns surrounding dust emissions from the cement companies resulted in environmental reports from both internal and external parties during the year, and associated increased scrutiny by regulatory agencies particularly in Jamaica. Meanwhile, RML has submitted proposals to the Environment Management Authority in Trinidad and Tobago, with regard to the 2009 Notice of Violation to the Melajo Quarry towards concluding the matter via a consent agreement. Consistent with the Group’s carbon reduction strategy, the Group continued to monitor its monthly carbon dioxide emissions in accordance with the IFC requirements. During the year, TCL and CCCL maintained on average the level of carbon dioxide emissions per tonne of cement in compliance with the benchmark recommended by the World Business Council on Sustainable Development and IFC; ACCL experienced challenges with fuel and electricity consumption efficiencies. Discussions regarding the Group’s energy optimisation projects, namely Waste Heat Recovery at CCCL and ACCL and use of Waste

Derived-Fuel at TCL and ACCL continued with key stakeholders and Government agencies during the year.

2.0 Financial Review and AnalysisThe year 2011 was even more difficult than 2010. At year-end, the Group had recorded six quarters of losses, as Management navigated through flat markets, low prices, difficult access to new markets, rising energy costs, working capital challenges and a protracted and costly debt restructuring exercise. In spite of these challenges, ACCL at Barbados was able to break into the French West Indies. An agreement was also signed with the WIN Group in Haiti to establish a cement terminal at Port-au-Prince and the Group’s LTAs were kept to single digit. The biggest disappointment, however, was the PetroCaribe-based arrangement for the supply of cement to Venezuela, which is yet to be finalised for CCCL in Jamaica.

RevenueGroup domestic cement sales volume was a modest 1% higher than the prior year’s level while export volume increased by 9%, reversing the trend of annual declines in sales volumes recorded in recent years. Although that was a welcomed development, the Group’s financial performance continued to be significantly affected by relatively low sales volumes (compared to that of the pre-global financial crisis), particularly in its three domestic markets and high energy costs. In 2011, Group third party revenue of $1.6 billion was materially unchanged from 2010 as the construction industry in our critical domestic markets and the wider Caricom region remained subdued. In Trinidad and Tobago, demand was stagnant in 2011 at the comparatively low level recorded for 2010, while in Barbados, cement volumes declined by 1.9%. In Jamaica, however, CCCL’s sales volume increased by 4% as the total market demand also grew by 4% amid Government’s action to further restrict the level of cement importation. This represented a reversal of the continuous decline in CCCL’s domestic sales over the past five years.Export cement volumes grew by 9.4%, with the increase emanating from TCL and CCCL partly attributable to new markets. This increase in

25



volume, though, was offset by slightly lower selling prices in an effort to grow market share. Total Group domestic cement volumes amounted to 1,198,700 metric tonnes (MT) compared with 1,192,500 MT for 2010, while export volumes were 621,000 MT compared with 568,000 MT for 2010. Concrete sales volume by RML amounted to 108,600 cubic metres compared with 119,800 cubic metres for 2010. The packaging sector’s sack and sling volumes increased by 4% and 8% respectively but jumbo bags volume decreased by 58% due to challenges in procuring raw materials during the first eight months of the year.

Earnings before Interest, Tax, Depreciation and Amortisation (Ebitda)Ebitda from continuing operations decreased by 50%, or $84.7 million to $84.3 million, reflecting a margin of 5.4% compared with 10.8% for 2010. For 2011, Ebitda was impacted by three factors, which had a significant negative impact. Primarily, revenue generated was low due to poor sales volume. Secondly, the Group’s operations carry a high level of fixed costs, particularly with completion of its capital-intensive plant expansion, while production was relatively low, resulting in a significant negative impact on the earnings statement. This was further aggravated by significant cost escalations of 22% for kiln fuel ($33.8 million), 21% for electricity ($39.1 million) and 14% for raw materials ($21 million), largely due to unit price increases. Production of clinker (1,468,705 MT) and cement (1,816,175 MT) were marginally higher than the prior year by 2% and 4% respectively. As a consequence of the low export bulk sales volumes, the Group’s trading company (TTL) was unable to recover the fixed lease costs of the two vessels it operates and so incurred a loss of $21.4 million on the shipping operation compared to a loss of $9.2 million in 2010.

Net Finance CostsNet Finance costs were $188.0 million compared to $148.4 million in 2010, an increase of $39.6 million or 27%. Finance costs included additional charges of $32.4 million for a 200 basis points increase from 14 January, 2011 on the original rates and agreed with lenders as part of the terms of the debt restructuring programme. There was also a

foreign exchange loss of $3.3 million in 2011 as a result of depreciation of the Jamaica and Trinidad and Tobago dollar against the United States dollar, compared to a gain in 2010 of $3.0 million.

Impairment ChargeThere was a non-cash charge of $79.4 million for impairment and write-off of CCCL’s moth-balled Kiln #4 and related assets due to the projected deferral of their return into production, given the debt restructuring exercise and difficult market conditions. These assets are expected to be utilised when market conditions improve, at which time their fair value will be recorded in the balance sheet.

Debt RestructuringOn 14 January, 2011, the TCL Group initiated a debt restructuring exercise under which a moratorium was declared on all debt service payments by all entities in the Group and negotiation with lenders was initiated. Accordingly, on 31 December, 2011, all loan agreements were in legal default through non-payment of interest and principal and non-compliance with other terms. At year-end, agreement in principle on the key terms of the debt restructuring with lenders was accomplished, while work continued on the legal agreements to give effect to the restructuring programme. On 10 May, 2012, the Group executed the various agreements and on 15 June all conditions and requirements were satisfied to bring closure to the exercise. A cost of $103.2 million associated with the debt restructuring exercise has been recognised in 2011.

26

ANNUAL REPORT 2011


Main Features of the Debt RestructuringThe key features of the restructuring are:• With the exception of Readymix (West Indies)

Limited and TCL Packaging Limited, the short and long-term debt of all other members of the Group has been effectively bundled into a 6.5 year facility, with quarterly interest payment recommencing in December 2012. Quarterly principal repayment will start in March 2013.

• Principal repayment will be 4% in 2013, 8.4% in 2014, 9.4% in 2015, 10.8% in 2016, 12% in 2017 and 9.6% plus a bullet of 45.8% in 2018.

• Interest rates on the restructured debt will be increased from the original rates by 200 basis points with a floor of 4% set for 6-month Libor and Prime based loans.

• An acceptance fee of 2% of the restructured debt was added to the principal outstanding as compensation to the lenders, whilst accrued interest outstanding at 10 May was also added to the principal outstanding for payment over the 6.5 years. Interest that is not paid at 30 June, 2012 and 30 September, 2012 may also be capitalised.

• The Group will have to satisfy three financial ratio covenants from March 2013 relating to Interest Coverage (Ebitda/Interest), Leverage (Debt/Ebtida) and Tangible Net Worth (Liabilities/Equity less Goodwill).

• Additional security was provided to lenders including those who were previously unsecured.

• RML and TPL were excluded from the ‘global’ restructuring as their debt was assessed to be manageable by them in accordance with the original terms.

• Dividends by the parent, Trinidad Cement Limited, will be restricted to a maximum of US$3 million, which can only be paid when the Leverage ratio is less than or equal to 3.

TaxationThere was an overall taxation credit of $72.8 million compared to a credit of $69.3 million for the previous year, mainly due to increased losses at CCCL in Jamaica. However, the Group did not recognise $46.3 million of deferred tax credits arising at CCCL on the grounds of prudence, given the prolonged difficult business conditions in that market.

Discontinued OperationsThe operations of two of the Group’s subsidiaries— Island Concrete Products N.V and Island Concrete SARL located in St. Maarten and St. Martin respectively—were disposed of effective 30 June, 2011, generating a net gain of $9.4 million for the year.A loss of $4.3 million was recorded in 2010, representing impairment of certain assets and property maintenance costs.

Net Profit attributable to Group ShareholdersThe Group recorded an overall loss of $375.0 million, which was net of a gain of $9.4 million related to discontinued operations, compared with a loss of $80.3 million for 2010. The loss attributable to Group shareholders amounted to $325.3 million compared with $48.5 million in 2010. As a consequence, the Loss per Share in 2011 was 132 cents compared with 20 cents for 2010.

Liquidity and Financial positionThe Group generated $100.8 million in cash from operations, compared with $38.8 million for 2010, after working capital contribution of $55.0 million. However, interest payments were only $10.3 million compared to $155.6 million in 2010 as a result of the moratorium on debt service payments. Investment in new property, plant and equipment amounted to $40.7 million, while $9.5 million was received mainly from the disposal of the St. Maarten/St Martin operations by RML. The Group repaid $32.6 million in long term debt (2010: $116.0 million) before declaration of the moratorium on debt repayment. With the declaration of the moratorium, the Group was in default of its loan agreements and therefore all long-term debt in default was reclassified to the current liability grouping. As a result, the Group is showing a working capital deficit position of $1,582 million at year-end. Subsequently, as a consequence of the post balance sheet date execution of the debt restructuring agreements, $1,890 million of debt obligations included as current liabilities at 10 May, 2012 have been appropriately reclassified again into long- term liabilities.

27


3.0 Group MarketingCement Sales

2010

TCL

548600.0

400.0

200.0

0

245

535 532

195

553

217112 112128

110

292

CCCL

Local Export

ACCL

2011 2010 2011 2010 2011

After two consecutive years of decline in the Group’s local cement sales volume, due largely to depressed economic activity following the global financial crisis, 2011 saw a general stabilisation with a modest 1% increase over 2010. Specifically, local cement sales in Jamaica increased by 4% due to the Government’s curtailment of quotas on imported foreign cement in August 2011 during a gradually recovering economy and cement market. Competition was extremely fierce in the first half of the year due to unfair market practices by the Dominican Republic (DR). CCCL eventually retaliated by exporting cement into the DR and was confronted by excessive tariff barriers and Governmental bureaucracy.In Trinidad and Tobago, the local market performed lower than expected, mainly because of a lack of major Government projects coupled with inclement weather conditions.In Barbados, ACCL recorded a 1.9% decline in domestic sales volume compared to 2010 despite a fairly stable economy in 2011, which also experienced increasing unemployment rates as well as high oil and commodity prices.Regionally, the Group increased its total exports by 9.4% to 621,000 MT largely through increased sales to Haiti and Brazil and ACCL’s initial exports to the FWI. Additionally, both the Suriname and Guyana markets remained robust and emergent during 2011.The Group’s total cement sales volume (1.82 million MT) was 3% above 2010 levels.The Readymix Group’s concrete sales volume fell by 9.3% from the 2010 level to 108,600 cubic metres as the construction sector remained stagnant in both Barbados and Trinidad & Tobago. In the latter domain, the actual implementation of Government projects previously alluded to did not materialise, while the market remained extremely competitive.The Packaging companies performed reasonably

well during the year with no major issues other than the unavailability of jumbo bag raw materials in the earlier half of the year. Paper sacks and slings recorded a moderate increase of 4% and 8% respectively over 2010, while the jumbo bag volume fell 58%.Essentially, the Group’s strategy of aggressive market expansion in its core business continues, albeit at a slower pace than anticipated, predominantly due to strong bureaucratic challenges in the FWI markets and the slow pace by the Venezuelan Government in finalising the PetroCaribe Contract.

4.0 Group Operations Clinker Production

TCL

800

600

400

200

0

622 629 628

194 184

656

CCCL ACCL

2010 2011

Cement Production

TCL

1000

800

600

400

200

0

791723 766

229 223

827

CCCL ACCL

2010 2011

Cement OperationsClinker production remains the key profit driver of the Group. The Group’s consolidated clinker production was 1.47 million tonnes, a marginal increase of 1.6% over 2010 volume.


28

ANNUAL REPORT 2011

At ACCL, the plant produced 184,061 MT or 5% less clinker than in 2010 as the kiln was off for 90 days in an attempt to monetise stock levels on hand amid its working capital challenges. The situation was further aggravated by increases in the cost of kiln fuel (Petcoke) and power station generated power of 39% and 38% respectively over 2010 levels.At CCCL, clinker production was 628,286 MT, a marginal 0.2% below 2010 level as the company continued to experience cash flow deficits and prioritise its maintenance activities as funds became available.At TCL, clinker production was 656,358 MT, an increase of 5.5% over the 2010 level as both of its kilns performed reasonably well throughout the year.It is anticipated that with the completion of the debt restructuring exercise in 2012, the Group’s plants will be in a better position to pursue certain deferred capital maintenance programmes.

Concrete OperationsIn a particularly stagnant and price sensitive market, RML balanced its marketing strategy within the limits of price competitiveness, leveraging on its quality systems and technical support to customers. While RML’s concrete sales in Trinidad decreased by 9.3%, the quarry arm continued to service third party demands, particularly to contractors involved in the road paving projects. Acquisition of a state-of-the-art wash plant which will increase the cost efficiency and effectiveness of the quarry operations was deferred to 2012 due to the working capital challenges being experienced throughout the Group.An evaluation of the quarry reserves was performed in August 2011, which will inform the mining plan over the next five years as RML positions itself for the implementation of the overdue Government projects and the Point Fortin Highway in particular.

Packaging OperationsTPL produced 31.8 million sacks, a 7% increase over 2010’s production level, despite some mechanical repair challenges and slowdown in production towards the end of the year as negotiations for a new collective agreement gradually deteriorated.

At TPM, sling production increased by 4.9% over the 2010 level to 393,500 slings to satisfy the Group’s moderately increased export of bagged cement. Production levels were hampered by higher than normal rates of absenteeism during a collective negotiation period, some equipment problems and reduced production time in the third quarter to facilitate staff as curfew measures took effect during the State of Emergency.Jumbo bag production fell 58% below 2010 to 33,500 as raw material was unavailable during the earlier half of the year.

Gypsum and Lime OperationsThe Group’s gypsum operations at Jamaica Gypsum and Quarries ended the year at 20% less gypsum output than 2010, largely due to the depleting reserves at the present mine and lack of available critical resources for maintenance of its mobile fleet. However, its pozzolan and shale production were 10% above the prior year to adequately supply the Group’s demand.ACCL’s Lime Division remained off due to the absence of markets. The plant will be restarted when firm contracts are in place.

5.0 Group Developmental Activities And ProjectsGroup developmental activities and projects in progress during 2010 and into 2011 advanced in varying degrees, as they were all adversely impacted by the limited availability of funds. Several planned initiatives had to be deferred pending completion of the debt restructuring exercise and the anticipated improved working capital position expected during 2012.

Haiti InitiativeThe development of business opportunities in Haiti was advanced with preliminary design of the cement terminal and site layout. The project is envisaged in three phases, the first being the establishment of a warehousing facility for bagged cement, the second, the inclusion of a site for bulk handling capability and the final, the addition of larger silos and bagging equipment.


29


A geotechnical study was conducted by Geotechsol (a French company with a presence in Haiti) during the last quarter in 2011. At year’s end, the results were being used to review the layout and determine the appropriate bulk storage approach. No further capital development has taken place since, but the Group continues to export product into Haiti through major players.

6.0 Human CapitalThe year proved to be quite challenging for the Group as collective agreement negotiations throughout the subsidiaries had to be managed in the context of the realities of the Group’s performance and recovery stage, the liquidity constraints and the prolonged and incomplete debt restructuring exercise.The situation at TCL and TPL in Trinidad culminated in a ninety day strike/lock out stalemate commencing at the end of February 2012. The matter has since been referred to the Industrial Court for determination upon the completion of the legal maximum duration of the strike/ lockout period.Despite these challenges, the 2011 planned Human Capital Development Programmes were pursued and effectively completed on a Group-wide basis.

7.0 Public RelationsThe Group prioritised its communication portfolio giving precedence to building brand loyalty, market defense and investor relations. Several core sponsorship initiatives had to be relinquished, including the West Indies Regional Under-19 Cricket tournament. However, the Group’s alliance with Habitat for Humanity to provide homes for low income families has been sustained. Every opportunity was taken to maintain a strong corporate image in the context of the challenges being faced.

8.0 Looking AheadAs alluded to above, the Group’s major performing plant, TCL along with TPL, endured a prolonged strike/lockout action from 27 February to 29 May, 2012. Management has initiated internal programmes to foster reintegration and promote ‘healing’ among its affected employees while various programmes also in progress to raise employee morale across the Group.Through completion of the debt restructuring exercise in May 2012, both management and staff will be better focussed in the second half of 2012 to manage the recovery process.

9.0 AcknowledgementsMy sincerest appreciation is extended to our valued shareholders and other stakeholders for their understanding, confidence and support during these difficult times. My gratitude also to the committed, hardworking and loyal employees of the TCL Group who have embraced the Group’s philosophy and vision and continue to press on in spite of the many challenges. Finally, I wish to thank the Group Chairman and members of the Board for their wise counsel and ongoing support.

Dr. Rollin BertrandGroup Chief Executive Officer


30

ANNUAL REPORT 2011

Efficiencies

The TCL Group constantly improves on efficient delivery and synergistic supply chain management. Our system of organisations, information and resources operate throughout the region.Thanks to the Group’s strong supply chain, which we are constantly developing and improving upon, our customers can be assured of safe and reliable deliveries by the TCL Group.

Building EfficienciesFrom the Ground Up

31


TCL Subsidiaries - Principal Officers

Trinidad Cement Limited

Company OverviewTrinidad Cement Limited was incorporated in Trinidad in 1951 and commenced production in 1954. Its primary activity is the manufacture and sale of Portland Pozzolan Cement, Ordinary Portland Cement, as well as Class G High Sulphate Resistant (HSR) Oilwell Cement. The distribution of its shareholding is detailed in the pie chart on page 11.

Principal Officers (L-R)Mr. Satnarine Bachew - General ManagerMr. Rodney Cowan - Marketing ManagerMs. Lisel Cozier - Materials ManagerMr. Harrinarine Dipnarine - Operations ManagerMr. Parasram Heerah - Finance ManagerMrs. Gloria Jacobs - Planning & Development ManagerMr. Keith Johnson - Human Resource ManagerLt. Col. (ret’d) Richardo Garcia - Health, Safety, Security & Environment ManagerMr. Raymond Hackett - Engineering Services ManagerMr. Ian Matthews - Projects ManagerMr. Taradath Ramdhanie - Quarry ManagerMr. Keith Ramjitsingh - Production Manager

Company SecretaryMr. Alan Nobie

Registered OfficeSouthern Main Road,Claxton Bay, Trinidad, W.I.Tel: (868) 659-2381-8Fax: (868) 659 2540Website: www.tcl.co.tt

32

ANNUAL REPORT 2011

TCL Subsidiaries - Principal Officers (continued)

Caribbean Cement Company

Company OverviewCaribbean Cement Company Limited (CCCL) was incorporated in Jamaica in 1947 and commenced production in 1952. Its primary activity is the manufacture and sale of Portland Pozzolan Cement and Ordinary Portland Cement. CCCL has three subsidiaries, namely Jamaica Gypsum & Quarries Limited, which is involved in the mining and sale of gypsum and anhydrite, Caribbean Gypsum Company Limited, which has major assets of gypsum/anhydrite quarry lands to enhance the reserve of raw material available to the Company, and Rockfort Mineral Bath Complex Limited, a national heritage site and mineral spa. The distribution of its shareholding is as follows:

Principal Officers (L-R)Mr. F.L. Anthony Haynes - General ManagerMr. Chester Adams - Planning & Development ManagerMr. Marchel Burrell - Quarry ManagerMr. Orville Hill - Finance ManagerMs. Alice Hyde - Marketing ManagerMr. Brett Johnson - Manufacturing ManagerMr. Raymond Mitchell - Quality ManagerMr. Dalmain Small - Human Resource ManagerMr. Adrian Spencer - Materials ManagerMr. Godfrey Stultz - Projects ManagerMr. Ken Wiltshire - Operations Manager

Company SecretaryMrs. Bernadene Crooks

Board of DirectorsMr. Brian Young (Chairman)Dr. Rollin BertrandMr. Bevon FrancisMr. Hollis N. HoseinMr. Derek JonesMr. Parris Lyew-AyeeMr. Lincoln ParmasarDr. Judith Robinson

Registered OfficeRockfort, Kingston,Jamaica.Tel: (876) 928-6231-5Fax: (876) 928-7381Website: www.caribcement.com

TCL Group 74.08%Cemex - Scancem International (St. Lucia) Ltd 4.96%Financial Institutions 3.71%Pension Plans 0.64%Government 1.81%Other 14.80%

33



Arawak Cement Company Ltd.

Company OverviewArawak Cement Company Limited was incorporated in Barbados in 1981 and was wholly acquired by TCL in 1994. Its primary activity is the manufacture and sale of Portland Pozzolan Cement and Lime.

Principal Officers (L-R)Mr. Rupert Greene - General ManagerMs. Faye Gill - Marketing ManagerMrs. Dawn Jemmott-Lowe - Human Resource ManagerMs. Leslie Maxwell - Engineering Services ManagerMs. Ayanna Garnes - Finance ManagerMr. Dwight Sutherland - Operations ManagerMr. Matthew Thornhill - Production ManagerMrs. Sheryllyn Welch-Payne - Materials Manager

Company SecretaryMrs. Dawn Jemmott-Lowe

Board of DirectorsMr. Jeffrey McFarlane (Chairman)Dr. Rollin BertrandMr. Satnarine BachewMr. Arun K. GoyalMr. Hollis N. HoseinMr. Frank McConneyMr. Joseph NunesMr. Lincoln Parmasar

Registered OfficeChecker Hall,St. Lucy, Barbados, BB27178Tel: (246) 439-9880Fax: (246) 439-7976Website: www.arawakcement.com.bb

TCL 100%

34

ANNUAL REPORT 2011


Readymix (West Indies) Ltd.

Company OverviewReadymix (West Indies) Limited was incorporated in Trinidad in 1961. Its primary activity is the manufacture and sale of premixed concrete. In 1996, Trinidad Cement Limited acquired majority ownership of the Company. RML acquired a 60% shareholding in Premix and Precast Concrete Inc. (PPCI) in Barbados in 2002. The shareholding is as follows:

Principal Officers (L-R)Mr. Manan Deo - General ManagerMrs. Reshma Gooljar-Singh - Marketing ManagerMr. Austin Rodriguez - Technical Services ManagerMr. Horace Boodoo - Senior Materials OfficerMs. Nicole Giuseppi - Senior Human Resource SpecialistMr. Ravi Singh - Quarry ManagerMrs. Diane Warwick - Finance ManagerMr. Malcolm Smith - Plant Manager (PPCI)

Company SecretaryMrs. Diane Warwick

Board of DirectorsMs. Eutrice Carrington (Chairman)Dr. Rollin BertrandMr. Satnarine BachewMr. Lawford DupresMr. Arun K. GoyalMr. Hollis N. HoseinMr. Lincoln ParmasarMr. Anton RamcharanMr. C.H. Wayne Manning

Registered OfficeTumpuna Road, Guanapo,Arima, Trinidad, W.I.Tel: (868) 643-2429/2430Fax: (868) 643-3209Website: www.readymix.co.tt

TCL 71.1%Other Shareholders 28.9%

35



TCL Packaging Ltd.

Company OverviewTCL Packaging Limited was incorporated in Trinidad in 1989 and commenced operations in 1991. Its primary activity is the manufacture and sale of papersacks. The distribution of its shareholding is as follows:

Principal Officers (L-R)Mr. Derrick Isaac - General ManagerMs. Sursatee Heeralal - Marketing & Logistics OfficerMr. Hilary Lakhiram - Operations ManagerMs. Betty Ann Noreiga - Marketing ManagerMr. Kaveer Seepersad - Senior Plant Coordinator

Company SecretaryMrs. Cheryl Gransaull

Board of DirectorsMr. Arun K. Goyal (Chairman)Mr. Joerg Schuschnig (Mondi Group – Parent Company of Dipeco Switzerland)Dr. Rollin BertrandMr. Satnarine BachewMr. Hollis N. HoseinMr. Lincoln Parmasar

Registered OfficeSouthern Main Road,Claxton Bay, Trinidad, W.I.Tel: (868) 659-2381-8Fax: (868) 659-0950

TCL 80%Dipeco (Switzerland) 20%

36

ANNUAL REPORT 2011


Principal Officers (L-R)Mr. Derrick Isaac - General ManagerMs. Sursatee Heeralal - Marketing & Logistics OfficerMs. Betty Ann Noreiga - Marketing ManagerMr. Stephen Ramcharan - Technical Coordinator

Company SecretaryMrs. Cheryl Gransaull

Board of DirectorsMr. Arun K. Goyal (Chairman)Dr. Rollin BertrandMr. Juan Ponsa (Industrias Ponsa - Spain)Ms. Laura Ponsa (Industrias Ponsa - Spain)Mr. Satnarine BachewMr. Hollis N. HoseinMr. Lincoln Parmasar

Registered Office#6 Freezone, Point Lisas Industrial Estate,Point Lisas, Trinidad, W.I.Tel: (868) 636-9627Fax: (868) 679-4120

TCL Ponsa Manufacturing Limited

Company OverviewTCL Ponsa Manufacturing Limited was incorporated in Trinidad in 1995. Its primary activity is the manufacture and sale of single use slings. It is also involved in the sale of jumbo bags, reusable slings, safety harnesses and polypropylene sacks, as well as webbing for use in the furniture industry. The distribution of its shareholding is shown below:

TCL 65%Industrias Ponsa S.A. (Spain) 35%

37


TCL Trading Ltd.

Company OverviewTCL Trading was incorporated in Anguilla, W.I. on 12 December, 1997 and commenced business in April 1998. Its primary activity is trading in cement and related products and it functions as a marketing support unit for the two cement companies, Trinidad Cement Limited and Arawak Cement Company Limited. The company is wholly owned by TCL.

Principal OfficerMr. Jaris Liburd – General Manager

Company SecretaryMr. Egwin Daniel

Board of DirectorsMr. Carlos Hee Houng (Chairman)Dr. Rollin Bertrand

Registered OfficeBox 885,Fair Play Complex,The Valley, Anguilla, W.I.Tel: (264)-497-3593Fax: (264)-497-8501

TCL 100%


38

ANNUAL REPORT 2011

TCL Guyana Incorporated

Company OverviewTCL Guyana Inc. was incorporated in the Republic of Guyana on 17 March, 2004. Its primary activity is the packaging of bulk cement for sale on the Guyanese market (cement terminal facility). The distribution of its shareholding is as follows:

Principal OfficerMr. Mark Bender - Plant Manager

Company SecretaryMr. Alan Nobie

Board of DirectorsMr. Hollis N. Hosein (Chairman)Dr. Rollin BertrandMr. Satnarine BachewMr. Arun K. GoyalMr. Vinode Persaud

Registered Office2-9 Lombard Street,GNIC Compound,Georgetown,Guyana.Tel: 011 (592) 225 - 7520Fax: 011 (592) 225 - 7347

TCL (Nevis) Limited 80% Anral Investments Limited 10% Toolsie Persaud Limited 10%


39


Management Proxy Circular

REPUBLIC OF TRINIDAD AND TOBAGOThe Companies Act, 1995(Section 144)

1. Name of Company: TRINIDAD CEMENT LIMITED Company No: T-51(C)

2. Particulars of Meeting: The Annual Meeting of the company to be held on 12 October, 2012 at 4:30 p.m. at the Training Room, TCL

Compound, Southern Main Road, Claxton Bay, Trinidad.

3. Solicitation: It is intended to vote the Proxy solicited hereby unless the Shareholder directs otherwise in favour of all resolutions

specified therein.

4. Any director’s statement submitted pursuant to Section 76(2): No statement has been received from any Director pursuant to Section 76(2) of The Companies Act, 1995.

5. Any auditor’s statement submitted pursuant to Section 171(1): No statement has been received from the Auditors of the Company pursuant to Section 171(1) of The Companies

Act, 1995.

6. Any shareholder’s proposal and/or statement submitted pursuant to Section 116(a) and 117(2): No proposal has been received from any Shareholder pursuant to Sections 116(a) and 117(a) of The Companies

Act, 1995.

Date Name and Title Signature

3 August, 2012 Alan Nobie, Secretary

40

ANNUAL REPORT 2011

The directors have pleasure in submitting their Report and the Audited Financial Statements for the year ended 31 December, 2011.

Financial Results TT$’000Turnover 1,560,860Net Earnings for the Year (325,315)Dividends Paid NIL

Trinidad Cement Limited Board of DirectorsDirectors’ Interest (Ordinary Shares of TCL) Holdings atName Position 31-12-11A. J Bhajan Chairman NilR. Bertrand Group CEO 659,756E. Carrington Director NilB. Francis Director NilC. Hee Houng Director 1,500G. Thomas Director NilL. Nurse Director NilJ.M. Allard Director NilB. Young Director NilL. Cantú Pinto Director Nil

Trinidad Cement Limited Senior OfficersSenior Officers’ Interest (Ordinary Shares of TCL)

Name Position Holdings at 31-12-11R. Bertrand Group CEO 659,756S. Bachew General Manager – TCL 338,247D. Caesar Group Human Resource Manager NilE. Daniel General Manager – International Business & Marketing 3,452M. Deo General Manager – Readymix (West Indies) Limited 133,352R. Greene General Manager – Arawak Cement Company Limited 8,090F.L.A. Haynes General Manager – Caribbean Cement Company Limited 33,797D. Isaac General Manager – TCL Packaging Ltd / TCL Ponsa Manufacturing Ltd 23,371J. Maharaj Group Manufacturing Development Manager 494,642A. Nobie Manager, Investor Relations & Corporate Communications/Company Secretary 26,573L. Parmasar Group Finance Manager 23,456

Directors’ Report

41


DividendsNo dividends have been declared for the year ended 31 December, 2011.

Substantial Interests No. of Ordinary Shares % of Issued Held at 31-12-11 Share CapitalSierra Trading (Cemex S.A. de C.V.) 49,953,027 20.00Republic Bank Limited 29,202,268 11.69The National Insurance Board 25,367,032 10.16Baleno Holding Inc 20,500,000 8.21RBTT Trust Limited 16,207,655 6.49

(A substantial interest means a beneficial holding of 5% or more of the issued share capital of the Company).

Service Contracts & DirectorsNo service contracts exist nor have been entered into by the Company and any of its Directors.

Directors• In accordance with Clause 4.4.2 of By-Law No. 1, Mr. George Thomas and Dr. Leonard Nurse, having been

appointed by the Board to fill casual vacancies is subject to election at the Annual Meeting for a period up to the conclusion of the second Annual Meeting following.

• In accordance with Clause 4.4.2 of By-Law No. 1, Mr. Jean Michel Allard, having been appointed by the Board to fill a casual vacancy, is subject to election at the Annual Meeting for a period up to the conclusion of the next Annual Meeting following.

• In accordance with Clause 4.6.1 of By Law No. 1, Mr. Andy Bhajan and Ms. Eutrice Carrington, who retire by rotation and being eligible, be re-elected directors of the company in accordance with Clause 4.6.1 of the By-Law No. 1 until the conclusion of the second Annual Meeting following.

• In accordance with Clause 4.4.1 of By-Law No. 1, Mr. Alejandro Alberto Ramirez Cantu is being nominated for election as a director for a period up to the conclusion of the second Annual Meeting following.

AuditorsThe Auditors, Ernst and Young, retire and, being eligible, offer themselves for re-election.

By Order of the Board

Alan NobieSecretary

Directors’ Report (continued)

42

ANNUAL REPORT 2011

A company is only as strong as its team, and the TCL Group spares no effort when it comes to putting together a motivated, capable and dependable family of employees throughout the Caribbean. Our customers are in the good hands of a highly qualified team of individuals, working every day to create value. The TCL Team will make our business succeed in the short-term, reaching new heights in the future.

TeamBuilding our TeamFrom the Ground Up

43


We have audited the accompanying consolidated financial statements of Trinidad Cement Limited and its subsidiaries (“the Group”) which comprise the consolidated statement of financial position as at 31 December, 2011 and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified OpinionIn 2011 management recorded impairment losses pertaining to certain plant and machinery and deferred tax assets amounting to $61.3 million and $46 million respectively. These impairment losses were determined based on management’s projections which assume that the Group will generate significant revenue from exports to a certain market under a proposed agreement currently under active negotiation, for which the terms and conditions have not been agreed at the date of this audit report. We have not obtained sufficient appropriate audit evidence to

Independent Auditors’ ReportTo the Shareholders of Trinidad Cement Limited

support the inclusion of the cashflows from these exports. Had management excluded these cashflows from its projections, the Group would have recognised an additional impairment loss of $131.4 million in the statement of income for the year then ended. The impact of this adjustment would reduce the carrying amount of plant and machinery, inventories (spares), deferred tax assets and Group equity by $90.9 million, $6.5 million, $34 million and $131.4 million respectively. Additionally, the Group would have reported total equity amounting to $1,036.7 million and net loss after tax of $506.4 million as at 31 December, 2011 and for the year then ended. Accordingly, the basic loss per share would be reported as ($1.72) for 2011.

Qualified OpinionIn our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December, 2011, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of matterWe draw attention to Note 27 in the financial statements which indicates that the Group has reported an operating loss of $166 million for the year ended 31 December, 2011 and the Group’s current liabilities have exceeded its current assets by $1.58 billion as at 31 December, 2011. The operating loss and net current liabilities have not been adjusted for the impact of the matters described in the Basis for Qualified Opinion paragraph above. Additionally, as described in Note 27, on 14 January, 2011 Trinidad Cement Limited (TCL) declared a moratorium on debt service payments by all entities in the Group and thereafter debt service payments falling due have not been made by TCL and its subsidiaries. The debt agreements of the TCL Group Companies are therefore in default and consequently lenders can initiate legal action to demand immediate repayment of outstanding loan obligations which the Group is not in a position to meet. These conditions, along with other matters as set forth in Note 27, indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. The financial statements have been prepared on the going concern basis because, as described in Note 27 the lenders have not sought to enforce their security and legal rights to call on the outstanding debt but have reached agreement in principle of the features of the restructuring and its key terms. Furthermore, based on current plans and strategies being pursued, including the anticipated successful completion of the debt restructure exercise, the Directors have a reasonable expectation that the Group will generate adequate cashflows and profitability which would allow the Group to continue in operational existence in the foreseeable future. Our opinion is not qualified in respect of this matter.

Port of SpainTRINIDAD:12 April, 2012

44

ANNUAL REPORT 2011

2011 2010Assets Notes $ $Non-current assetsProperty, plant and equipment 8 2,277,294 2,493,206Goodwill 9 215,831 215,831Pension plan asset 10 (a) 215,671 216,072Receivables 12 10,913 9,203Deferred tax assets 6 (d) 424,674 418,576

3,144,383 3,352,888Current assetsInventories 11 557,019 569,072Receivables and prepayments 12 193,888 175,367Cash at bank and on hand 13 57,755 20,416

808,662 764,855

Assets classified as held for sale 26 – 3,178

808,662 768,033

Total assets 3,953,045 4,120,921

The accompanying notes form an integral part of these financial statements.

Consolidated Statement of Financial PositionAs at 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

45


Consolidated Statement of Financial Position (continued)As at 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

2011 2010 Notes $ $Equity and liabilitiesEquityStated capital 17 (a) 466,206 466,206Unallocated ESOP shares 19 (25,299) (28,658)Other reserves 17 (b) (180,069) (202,579)Retained earnings 864,882 1,189,938

Equity attributable to the parent 1,125,720 1,424,907

Non-controlling interests 42,411 92,405

Total equity 1,168,131 1,517,312

Non-current liabilitiesBorrowings not subject to restructuring 16 2,923 8,521Post-retirement obligations 10 (a) 21,609 19,325Deferred tax liabilities 6 (d) 369,693 438,357

394,225 466,203Current liabilitiesBank overdraft and advances 14 447 123Payables and accruals 15 714,802 433,839Swap obligation 16 (b) (iv) – 33,349Current portion of borrowings not subject to restructuring 16 2,750 4,501Borrowings subject to restructuring 16 1,672,690 1,661,387

2,390,689 2,133,199Liabilities associated with assets classified as held for sale 26 – 4,207

2,390,689 2,137,406

Total equity and liabilities 3,953,045 4,120,921


On 28 March, 2012, the Board of Directors of Trinidad Cement Limited authorised these financial statements for issue and were signed on their behalf by:

___________________________ Director ______________________ Director

46

ANNUAL REPORT 2011

2011 2010 Notes $ $Continuing operationsRevenue 1,560,860 1,561,084

Earnings before interest, tax and depreciation 3 84,274 169,001

Depreciation 8 (170,979) (165,975)

Impairment charges and write-offs 3 (79,386) –

Operating (loss)/profit 3 (166,091) 3,026

Restructuring expenses 4 (103,201) –

Finance costs 5 (187,960) (148,364)

Loss before taxation from continuing operations (457,252) (145,338)

Taxation 6 72,823 69,264

Loss for the year from continuing operations (384,429) (76,074)

Discontinued operations

Operating loss for the year from discontinued operations 26 (1,681) (4,253)

Gain on disposal of discontinued operations 26 11,092 –

Net income/(loss) for the year from discontinued operations 9,411 (4,253)

Loss for the year (375,018) (80,327)

Attributable to:Shareholders of the parent (325,315) (48,549)Non-controlling interests (49,703) (31,778)

(375,018) (80,327)

Basic (loss)/earnings per share: From continuing operations (expressed in $ per share) 7 ($1.35) ($0.18) From discontinued operations (expressed in $ per share) 7 $ 0.03 ($0.02)

($1.32) ($0.20)


Consolidated Statement of IncomeFor the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

47


Consolidated Statement of Comprehensive IncomeFor the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

2011 2010 Notes $ $Loss for the year (375,018) (80,327)

Other comprehensive income

Net movement on cash flow hedge (interest rate swap) 17 (b) 30,645 (5,416)Income tax effect 17 (b) (7,661) 1,331

22,984 (4,085)

Exchange differences on translation of foreign operations (765) 22,657

Other comprehensive income for the year, net of tax 22,219 18,572

Total comprehensive loss for the year, net of tax (352,799) (61,755)

Attributable to:Shareholders of the parent (302,805) (35,181)Non-controlling interests (49,994) (26,574)

(352,799) (61,755)


48

ANNUAL REPORT 2011

Equi

ty at

tribu

tabl

e to

the

Pare

nt

Unal

loca

ted

No

n-

Note

s St

ated

ES

OP

Othe

r Re

tain

ed

co

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lling

To

tal

capi

tal

shar

es

rese

rves

ea

rnin

gs

Tota

l in

tere

sts

equi

ty

$

$ $

$ $

$ $

Year

end

ed 3

1 De

cem

ber,

2011

Balan

ce at

1 Ja

nuar

y, 20

11

46

6,206

(2

8,658

) (2

02,57

9)

1,189

,938

1,424

,907

92,40

5 1,5

17,31

2

Othe

r com

preh

ensiv

e in

com

e 17

–

– 22

,510

– 22

,510

(291

) 22

,219

Loss

for t

he ye

ar

–

–

– (

325,3

15)

(32

5,315

) (4

9,703

) (

375,0

18)

Tota

l com

preh

ensiv

e in

com

e/(lo

ss)

–

– 22

,510

(325

,315)

(3

02,80

5)

(49,9

94)

(352

,799)

Allo

catio

n to

em

ploy

ees o

f ESO

P s

hare

s net

of d

ivide

nds

–

3,359

–

26

3,385

–

3,385

Divid

ends

forfe

ited

18

–

–

–

233

2

33

–

233

Balan

ce at

31

Dece

mbe

r, 20

11

46

6,206

(2

5,299

) (1

80,06

9)

864

,882

1,125

,720

42,4

11

1,168

,131

Year

end

ed 3

1 De

cem

ber,

2010

Balan

ce at

1 Ja

nuar

y, 20

10

46

6,206

(2

9,345

) (2

15,94

7)

1,238

,825

1,459

,739

119,5

48

1,579

,287

Othe

r com

preh

ensiv

e in

com

e 17

–

– 13

,368

– 13

,368

5,204

18

,572

Profi

t/(lo

ss) f

or th

e ye

ar

–

–

–

(48,5

49)

(48

,549)

(3

1,778

)

(80,3

27)

Tota

l com

preh

ensiv

e in

com

e/ (l

oss)

–

– 13

,368

(48,5

49)

(35,1

81)

(26,5

74)

(61,7

55)

Allo

catio

n to

em

ploy

ees o

f ESO

P s

hare

s net

of d

ivide

nds

–

687

– (6

63)

24

– 24

Divid

ends

forfe

ited/

(paid

) 18

–

–

–

3

25

325

(5

69)

(244

)

Balan

ce at

31

Dece

mbe

r, 20

10

46

6,206

(2

8,658

) (2

02,57

9)

1,189

,938

1,424

,907

92

,405

1,517

,312

The

acco

mpa

nyin

g no

tes f

orm

an in

tegr

al pa

rt of

thes

e fin

ancia

l sta

tem

ents.

Consolidated Statement of Changes in EquityFor the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

49


Consolidated Statement of Cash FlowsFor the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

2011 2010 Notes $ $Cash from continuing operations 160,440 212,846Cash from discontinued operations – (356)

Cash from operations 21 160,440 212,490

Pension contributions paid 10 (c) (8,414) (8,990)Post-retirement benefits paid 10 (d) (993) (616)Taxation paid (6,812) (8,490)Restructuring expenses paid (33,125) –Net interest paid (10,282) (155,554)

Net cash generated by operating activities 100,814 38,840

Investing activitiesAdditions to property, plant and equipment 8 (40,721) (63,673)Proceeds from disposal of property, plant and equipment 9,546 8,222

Net cash used in investing activities (31,175) (55,451)

Financing activitiesRepayment of borrowings (32,565) (116,015)Proceeds/transfer of short-term advances – 180,565Dividends paid to minority interests – (569)

Net cash used in financing activities (32,565) 63,981

Net increase/(decrease) in cash and borrowings 37,074 47,370Net foreign exchange difference (59) (6,381)Net cash/(borrowings) – beginning of year 20,293 (20,696)

Net (borrowings)/cash – end of year 57,308 20,293

Represented by:

Cash at bank and short term deposits 13 57,755 20,416Bank overdraft – continuing operations 14 (447) (123)

57,308 20,293


Equi

ty at

tribu

tabl

e to

the

Pare

nt

Unal

loca

ted

No

n-

Note

s St

ated

ES

OP

Othe

r Re

tain

ed

co

ntro

lling

To

tal

capi

tal

shar

es

rese

rves

ea

rnin

gs

Tota

l in

tere

sts

equi

ty

$

$ $

$ $

$ $

Year

end

ed 3

1 De

cem

ber,

2011

Balan

ce at

1 Ja

nuar

y, 20

11

46

6,206

(2

8,658

) (2

02,57

9)

1,189

,938

1,424

,907

92,40

5 1,5

17,31

2

Othe

r com

preh

ensiv

e in

com

e 17

–

– 22

,510

– 22

,510

(291

) 22

,219

Loss

for t

he ye

ar

–

–

– (

325,3

15)

(32

5,315

) (4

9,703

) (

375,0

18)

Tota

l com

preh

ensiv

e in

com

e/(lo

ss)

–

– 22

,510

(325

,315)

(3

02,80

5)

(49,9

94)

(352

,799)

Allo

catio

n to

em

ploy

ees o

f ESO

P s

hare

s net

of d

ivide

nds

–

3,359

–

26

3,385

–

3,385

Divid

ends

forfe

ited

18

–

–

–

233

2

33

–

233

Balan

ce at

31

Dece

mbe

r, 20

11

46

6,206

(2

5,299

) (1

80,06

9)

864

,882

1,125

,720

42,4

11

1,168

,131

Year

end

ed 3

1 De

cem

ber,

2010

Balan

ce at

1 Ja

nuar

y, 20

10

46

6,206

(2

9,345

) (2

15,94

7)

1,238

,825

1,459

,739

119,5

48

1,579

,287

Othe

r com

preh

ensiv

e in

com

e 17

–

– 13

,368

– 13

,368

5,204

18

,572

Profi

t/(lo

ss) f

or th

e ye

ar

–

–

–

(48,5

49)

(48

,549)

(3

1,778

)

(80,3

27)

Tota

l com

preh

ensiv

e in

com

e/ (l

oss)

–

– 13

,368

(48,5

49)

(35,1

81)

(26,5

74)

(61,7

55)

Allo

catio

n to

em

ploy

ees o

f ESO

P s

hare

s net

of d

ivide

nds

–

687

– (6

63)

24

– 24

Divid

ends

forfe

ited/

(paid

) 18

–

–

–

3

25

325

(5

69)

(244

)

Balan

ce at

31

Dece

mbe

r, 20

10

46

6,206

(2

8,658

) (2

02,57

9)

1,189

,938

1,424

,907

92

,405

1,517

,312

The

acco

mpa

nyin

g no

tes f

orm

an in

tegr

al pa

rt of

thes

e fin

ancia

l sta

tem

ents.

50

ANNUAL REPORT 2011

1. Incorporation and activities

Trinidad Cement Limited (the “Parent Company”) is a limited liability company incorporated and resident in the Republic of Trinidad and Tobago and its shares are publicly traded on the Trinidad and Tobago Stock Exchange (TTSE), Jamaica Stock Exchange (JSE), Barbados Stock Exchange (BSE), Eastern Caribbean Securities Exchange (ECSE) and the Guyana Association of Securities Companies and Intermediaries Inc. (GASCI). The Group (Trinidad Cement Limited and Consolidated Subsidiaries) is involved in the manufacture and sale of cement, lime, premixed concrete, packaging materials and the winning and sale of sand, gravel and gypsum. The registered office of the Parent Company is Southern Main Road, Claxton Bay, Trinidad.A listing of the Group’s subsidiary companies is detailed in Note 23.

2. Significant accounting policies

a) Basis of preparation The consolidated financial statements of the Group

are prepared under the historical cost convention, except for derivative financial instruments that has been measured at fair value.

Statementofcompliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Changesinaccountingpolicyanddisclosures

The accounting policies adopted are consistent with those of the previous financial year except that the Group has adopted the following new and amended IFRS and IFRIC (International Financial Reporting Interpretations Committee) interpretations as of 1 January, 2011:• IAS 24 Related Party Disclosures (amendment)

effective 1 January, 2011• IAS 32 Financial Instruments: Presentation

(amendment) effective 1 February, 2010

Notes to the Consolidated Financial StatementsFor the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

• IFRIC 14 Prepayments of a Minimum Funding Requirement (amendment) effective 1 January, 2011

• Improvements to IFRSs (May 2010)The adoption of the standards or interpretations is described below:

IAS 24 Related Party Transactions (Amendment)The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions emphasise a symmetrical view of related party relationships and clarified the circumstances in which persons and key management personnel affect related party relationships of an entity. In addition, this amendment introduces an exemption from the general related party disclosure requirements for transactions with government and entities that are controlled, jointly or significantly influenced by the same government as the reporting entity. The adoption of the amendment did not have any impact on the financial position or performance of the Group.

IAS 32 Financial Instruments: Presentation (Amendment)The IASB issued an amendment that alters the definition of a financial liability in IAS 32 to enable entities to classify rights issues and certain options or warrants as equity instruments. The amendment is applicable if the rights are given pro rata to all of the existing owners of the same class of an entity’s non-derivative equity instruments, to acquire a fixed number of the entity’s own equity instruments for a fixed amount in any currency. The amendment has had no effect on the financial position or performance of the Group.

IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendment)The amendment removes an unintended consequence when an entity is subject to minimum funding requirements and makes an entity payment of contributions to cover such requirements. The amendment permits a prepayment of future service cost by the entity to be recognised as a pension asset. The amendment of the interpretation has no effect on the financial position or performance of the Group.

51


Notes to the Consolidated Financial Statements (continued)For the year ended 31 December, 2011(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)

2. Significant accounting policies (continued)

a) Basis of preparation (continued)Changes in accounting policy and disclosures(continued)

TheGroup has not adopted early the following newandrevisedIFRS’sandIFRICinterpretationsthathavebeenissuedbutarenotyeteffectiveornotrelevanttotheGroup’soperations:

• IAS 1 Presentation of Items of Other Comprehen-sive Income – Amendments to IAS 1 – Effective 1 July, 2012

• IAS 12 Income Taxes (Amendment) – Deferred Taxes: Recovery of Underlying Assets – Effective 1 January, 2012

• IAS 19 – Employee Benefits (Revised) – Effective 1 January, 2013

• IAS 27 – Separate Financial Statements - Effective for periods beginning on or after 1 January, 2013

• IAS 28 – Investments in Associates and Joint Ventures – Effective 1 January, 2013

• IFRS 1 First-time Adoption of International Financial Reporting Standards (Amendment) – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters – Effective 1 July, 2011

• IFRS 7 Financial Instruments: Disclosures (Amendment) – Effective 1 July, 2011

• IFRS 9 Financial Instruments: Classification and Measurement effective 1 January, 2013

• IFRS 10 Consolidated Financial Statements – Effective 1 January, 2013

• IFRS 11 Joint Arrangements – Effective 1 January, 2013

• IFRS 12 Disclosure of Interests in Other Entities – Effective 1 January, 2013

• IFRS 13 Fair Value Measurement – Effective 1 January, 2013

ImprovementstoIFRSs(issuedinMay2010)

The IASB issued its third omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. The amendments listed below are considered to have a reasonable possible impact on the Group or are not relevant to the Group’s operations:• IFRS 3 Business Combinations• IFRS 7 Financial Instruments: Disclosures• IAS 1 Presentation of Financial Statements• IAS 27 Consolidated and Separate Financial

Statements• IAS 34 Interim Financial Statement • IFRIC 13 Customer Loyalty Programmes • IFRIC 19 Extinguishing Financial Liabilities with

Equity Instruments

b) Basis of consolidationThese consolidated financial statements comprise the financial statements of Trinidad Cement Limited (the Parent) and its subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent, using consistent accounting policies. Subsidiary undertakings, being those companies in which the Group, directly or indirectly, has an interest of more than one half of the voting rights, are fully consolidated from the date of acquisition, being the date on which the Group obtained control. All intercompany transactions, balances, and unrealised surpluses and deficits on transactions between Group companies are eliminated.Non-controlling interests represent the portion of profit or loss and net assets, not held by the Group and are presented separately in the consolidated statements of income and comprehensive income as well as within equity in the consolidated statement of financial position.

52

ANNUAL REPORT 2011


c) Significant accounting judgments, estimates and assumptionsThe preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The key judgments, estimates and assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Impairmentofgoodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimate of the value in use of the cash generating units to which goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate the present value of these cash flows. Further details are given in Note 9.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the existence of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of


previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company’s domicile.Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Pensionandpost-retirementbenefits

The cost of defined benefit pension plans and other post retirement benefits is determined using actuarial valuations. The actuarial valuation involves making judgements and assumptions in determining discount rates, expected rates of return on assets, future salary increases and future pension increases. Due to the long term nature of these plans, such assumptions are subject to significant uncertainty. All assumptions are reviewed at each reporting date.

Property,plantandequipment

Management exercises judgment in determining whether costs incurred can accrue significant future economic benefits to the Group to enable the value to be treated as a capital expense.Further judgment is applied in the annual review of the useful lives of all categories of property, plant and equipment and the resulting depreciation determined thereon.

Provisionfordoubtfuldebts

Management exercises judgment in determining the adequacy of provisions established for accounts receivable balances for which collections are considered doubtful. Judgment is used in the assessment of the extent of the recoverability of certain balances. Actual outcomes may be materially different from the provision established by management.

53




d) Business combinations and goodwillBusiness combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identitifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill

acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

e) Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long term construction projects if the recognition criteria are met. All other repairs and maintenance are recognised in the statement of income.Depreciation is provided on the straight line or reducing balance basis at rates estimated to write-off the assets over their expected useful lives. The estimated useful lives of assets are reviewed periodically, taking account of commercial and technological obsolescence as well as normal wear and tear, and the depreciation rates are adjusted if appropriate. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

Current rates of depreciation are:Buildings - 2% - 4%Plant, machinery and equipment - 3% - 25%Motor vehicles - 10% - 25%Office furniture and equipment - 10% - 33%

54

ANNUAL REPORT 2011



e) Property, plant and equipment (continued)Leasehold land and improvements are amortised over the remaining term of the lease. Freehold land and capital work-in-progress are not depreciated. The limestone reserves contained in the leasehold land at a subsidiary is valued at fair market value determined at the date of acquisition of the subsidiary. A depletion charge is recognised based on units of production from those reserves.All other limestone reserves which are contained in lands owned by the Group are not carried at fair value but the related land is stated at historical cost.An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on the derecognising of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of asset) is included in the statement of income in the year the asset is derecognised.

f) InventoriesPlant spares, raw materials and consumables are valued at the lower of weighted average cost and net realisable value. Net realisable value is arrived at after review by technical personnel.Work in progress and finished goods are valued at the lower of cost, including attributable production overheads, and net realisable value. Net realisable value is the estimate of the selling price less the costs of completion and direct selling expenses.

g) Foreign currency translationThe consolidated financial statements are presented in Trinidad and Tobago dollars (expressed in thousands), which is the Group’s functional and presentation currency. This is the currency of the primary economic environment in which the Group operates. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Foreigncurrencytransactions

Transactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Trinidad and Tobago dollars at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Exchange differences on foreign currency transactions are recognised in the statement of income.

Foreignentities

On consolidation, assets and liabilities of foreign entities are translated into Trinidad and Tobago dollars at the rate of exchange ruling at the financial reporting date and their statement of income are translated at the weighted average exchange rates for the year. The exchange differences arising on re-translation are recognised in other comprehensive income.

h) Deferred expenditureThe cost of installed refractories, chains and grinding media is amortised over a period of six to twelve months to match the estimated period of their economic usefulness.

i) Segment informationThe Group’s operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.The Group generally accounts for inter-segment sales and transfer as if the sales or transfers were to third parties at current market prices. Revenues are attributable to geographic areas based on the location of the assets producing the revenues.

55




j) Financial instrumentsFinancial instruments carried on the statement of financial position include cash and bank balances including advances/overdrafts, accounts receivables, accounts payables, and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

k) Derivative financial instruments and hedgingThe Group uses derivative financial instruments such as interest rate swaps to hedge its risk associated with interest rate fluctuations. Such derivative financial instruments are recognised initially at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets or liabilities. Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken directly to the statement of income.The Group entered into a cashflow hedge relationship to hedge its exposure to variability in cashflows arising from a portion of floating rate debt. Gains or losses on derivatives that meet the strict criteria for hedge accounting are taken to other comprehensive income from where amounts are transferred to the statement of income to offset fluctuations in revenue or expense from the underlying hedged item as it is recognised. As discussed in note 16(b)(iv) the interest rate swap agreements were terminated on 13 April, 2011.

l) LeasesOperatingleases

Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the statement of income on a straight-line basis over the period of the lease.

Financeleases

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased assets or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

m) TaxationCurrentincometax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferredincometax

A deferred tax charge is provided, using the liability method, on all temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, to the extent that it is probable that future taxable profit will be available against which these deductible temporary differences and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax assets to be utilised.

56

ANNUAL REPORT 2011



n) Pension plans and post-retirement medical benefitsDefined benefit pension plans are generally funded by payments from employees and by the relevant Group companies, taking into account the recommendations of independent professional actuaries.For defined benefit plans, the pension accounting costs are assessed using the projected unit credit method. Under this method, the annual cost of providing pensions is charged to the statement of income so as to spread the regular cost over the service lives of employees in accordance with the advice of independent professional actuaries who carry out a full valuation of the plans every three years.The pension obligation is measured as the present value of the estimated future cash outflows using interest rates of government securities which have terms to maturities approximating the terms of the related liabilities. All actuarial gains and losses to be recognised are spread forward over the average remaining service lives of employees. Defined contribution plans are accounted for on the accrual basis, as the Group’s liabilities are limited to its contributions.Certain subsidiaries provide post-retirement healthcare benefits to their retirees. The expected costs of these benefits are measured and recognised in a manner similar to that for defined benefit pension plans. Valuation of these obligations is carried out by independent professional actuaries using an accounting methodology similar to that for the defined benefit pension plans.

o) Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and sales taxes. The following specific recognition criteria must be met before revenue is recognised:

Salesofgoods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods.

Interestandinvestmentincome

Interest and investment income are recognised as they accrue unless collectability is in doubt.

p) Trade and other receivablesTrade and other receivables are carried at anticipated realisable value. Provision is made for specific doubtful receivables based on a review of all outstanding amounts at the year-end.

q) Trade and other payablesLiabilities for trade and other payables, which are normally settled on 30-90 day terms are carried at cost, which is the fair value of the consideration to be paid in the future for goods and services received or not billed to the Group.

r) Interest bearing loans and borrowingsBorrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. In subsequent periods, borrowings are stated at amortised cost using the effective interest method, any differences between proceeds and the redemption value is recognised in the statement of income over the period of the borrowings.

s) Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

57




t) ProvisionsProvisions are recorded when the Group has a present or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

u) Earnings per share Earnings per share is computed by dividing net profit attributable to the shareholders of the Parent for the year by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is computed by adjusting the weighted average number of ordinary shares in issue for the assumed conversion of potential dilutive ordinary shares into issued ordinary shares. The Group has no dilutive potential ordinary shares in issue.

v) Cash and cash equivalentsFor the purpose of the statement of cash flows, cash and cash equivalents include all cash and bank balances and overdraft balances with maturities of less than three months from the date of establishment.

w) Equity compensation benefitsThe Group accounts for profit sharing entitlements which are settled in the shares of the Parent Company through an Employee Share Ownership Plan (ESOP) as an expense determined at market value. The cost incurred in administering the Plan is recorded in the statement of income of the Parent Company. The cost of the unallocated shares of the Parent Company is recognised as a separate component within equity.

x) Impairment of assetsNon-financialassets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the statement of income in those expense categories consistent with the function of the impaired asset.For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment been recognised for the asset in prior years. Such reversal is treated as a revaluation increase. Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its recoverable amounts.

58

ANNUAL REPORT 2011



x) Impairment of assets (continued)Financialassets

The carrying value of all financial assets not carried at fair value through the income statement is reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. The identification of impairment and the determination of recoverable amounts is an inherently uncertain process involving various assumptions and factors, including the financial condition of the counterparty, expected future cash flows, observable market prices and expected net selling prices.

y) Non-current assets held for sale and discontinued operationsNon-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to

the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of income.Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

z) Comparative informationCertain changes in presentation have been made in these consolidated financial statements. These changes include the reclassification of certain borrowings of the previous year (2010) to preserve comparability with current year classifications. This reclassification together with other minor changes in prior year comparatives has no effect on the net assets or operating results of the Group for the previous year.

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3. Operating profit – continuing operations

2011 2010 $ $

Revenue 1,560,860 1,561,084Less expenses:Personnel remuneration and benefits (see below) 433,698 445,352Raw materials and consumables 172,989 152,114Fuel and electricity 412,712 339,759Operating expenses 213,779 209,627Repairs and maintenance 95,933 94,415Equipment hire and haulage 155,400 141,947Changes in finished goods and work in progress 2,332 27,221Other income (see below) (10,257) (18,352)

Earnings before interest, tax and depreciation 84,274 169,001

Depreciation 170,979 165,975Impairment charges and write-offs 79,386 –

Operating (loss)/profit (166,091) 3,026

Impairment charges and write-offs reflect the partial impairment of the CCCL Kiln 4 asset in the amount of $61.3 million and the write-off of Kiln 4’s related equipment of $18.1 million that is now obsolete. The carrying amount of Kiln 4 and related assets have been written down as a result of the deferral in the projected refurbishment and reactivation of this plant. The carrying value of the Kiln 4 asset has therefore been reduced from $227 million to $147.6 million as at 31 December, 2011. The Group plans to refurbish and return Kiln 4 into production.

Personnel remuneration and benefits include:Salaries and wages 356,063 348,824Other benefits 38,972 46,590Statutory contributions 18,698 18,729Pension costs – defined contribution plan 3,999 4,748Termination benefits 7,151 9,652Net pension expense – defined benefit plans (Note 10 b) 8,815 16,809

433,698 445,352

Operating profit is stated after deducting directors’ fees of:Directors’ fees 790 753

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ANNUAL REPORT 2011

3. Operating profit - continuing operation (continued)

2011 2010 $ $

Other income includes: (Loss)/gain from disposal of property, plant and equipment (3,429) 7,084Delivery and trucking services 4,650 4,672Miscellaneous income 9,036 6,596

10,257 18,352

4. Restructuring expenses

The debt restructuring expenses comprise legal and advisory fees of $40.4 million, acceptance fees of $35.3 million and swap termination cost of $27.5 million.

5. Finance costs

2011 2010 $ $

Interest expense 184,786 151,419Interest income (83) (84)

184,703 151,335Foreign currency exchange loss/(gain) 3,257 (2,971)

187,960 148,364

An additional 200 basis points on existing interest rates have been recorded from January 2011, in accordance with the terms of the debt restructuring agreed in principle with lenders.


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6. Taxation

2011 2010 $ $

a) Taxation (credit)/charge

Deferred taxation (Note 6 c)) (82,577) (75,581) Current taxation 9,754 6,317

(72,823) (69,264)

b) Reconciliation of applicable tax charge to effective tax charge

Loss before taxation from continuing operations (457,252) (145,338)Gain/(loss) before taxation from discontinued operations 9,411 (4,253)

Loss before taxation (447,841) (149,591)

Tax calculated at 25% (111,960) (37,398)Net effect of other charges and disallowances 43,476 15,246Tax losses for which no deferred tax income were recognised 46,000 –Impact of income not subject to tax (32,358) (38,436)Business and green fund levies 2,315 2,114Effect of different tax rates outside Trinidad and Tobago (20,296) (10,790)Taxation charge reported in the consolidated income statement – continuing operations (72,823) (69,264)Taxation charge attributable to a discontinued operation – –

(72,823) (69,264)

A deferred tax asset of $46 million in relation to tax losses available for reducing future tax payments was not recognised in the Statement of Financial Position given the extended timeframe the losses are estimated to be utilised.Trinidad Cement Limited has tax losses of $872 million (2010: $805 million) available for set off against future taxable profits.Caribbean Cement Company Limited and its subsidiaries have tax losses of $492.5 million (2010: $328 million) available for set off against future taxable profits.Readymix (West Indies) Limited and its subsidiaries have tax losses of $9.9 million (2010: $5.2 million) available for set off against future taxable profits.These losses are subject to approval of the respective tax authorities.

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ANNUAL REPORT 2011

6. Taxation (continued)

c) Movement in deferred tax net balance: 2011 2010 $ $

Net balance at 1 January (19,781) (96,264)Exchange rate and other adjustment (154) (429)(Debit)/credit to hedging reserve (7,661) 1,331Credit to earnings 82,577 75,581

Net balance at 31 December (Note 6 d)) 54,981 (19,781)

d) Components of the deferred tax assets/(liabilities) are as follows:

2011 2010 $ $

Deferred tax liabilities:Property, plant and equipment (312,872) (380,411)Pension plan assets (56,821) (57,946)

Balance at 31 December (369,693) (438,357)

Deferred tax assets:Tax losses carry forward 327,974 354,411Capital allowances carry forward 34,298 42,841Interest accrual 32,872 –Others 29,530 13,663Swap obligation – 7,661

Balance at 31 December 424,674 418,576

Net deferred tax asset/(liability) 54,981 (19,781)


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7. Earnings per share

2011 2010 $ $

The following reflects the income and share data used in the earnings per share computation:

Net loss for the year attributable to equity holders of the Parent - continuing operations (331,997) (45,529)

Net profit/(loss) for the year attributable to equity holders of the Parent - discontinued operations 6,682 (3,020)

Net loss for the year attributable to equity holders- total Group (325,315) (48,549)

Weighted average number of ordinary shares issued (thousands of units) 245,869 245,485

Basic loss per share – continuing operations (expressed in $ per share) ($1.35) ($0.18)

Basic earnings/(loss) per share – discontinued operations $0.03 ($0.02) (expressed in $ per share)

Basic loss per share – total (expressed in $ per share) ($1.32) ($0.20)

The balance of the TCL Employee Share Ownership Plan relating to the cost of unallocated shares held by the Plan is presented as a separate component in equity. The weighted average number of unallocated shares of 3.896 million (2010: 4.280 million) held by the Plan during the year is deducted in computing the weighted average number of ordinary shares in issue. The Group has no dilutive potential ordinary shares in issue.

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ANNUAL REPORT 2011


8. Property, plant and equipment

Plant, machinery and Office equipment furniture Capital Land and and motor and work in buildings vehicles equipment progress Total $ $ $ $ $At 31 December, 2011Cost 459,335 3,315,849 108,568 43,452 3,927,204Accumulated depreciationand impairment (164,793) (1,401,740) (83,377) – (1,649,910)

Net book amount 294,542 1,914,109 25,191 43,452 2,277,294

Net book amount1 January, 2011 305,283 2,117,936 34,518 35,469 2,493,206Exchange rate adjustments (760) (1,695) (45) (203) (2,703)Additions and transfers 1,468 28,893 2,174 8,186 40,721Disposals and adjustments (43) (3,062) (460) – (3,565)Depreciation charge (11,406) (148,577) (10,996) – (170,979)Impairment charge andwrite off – (79,386) – – (79,386)

31 December, 2011 294,542 1,914,109 25,191 43,452 2,277,294

At 31 December, 2010Cost 459,011 3,304,409 107,886 35,469 3,906,775Accumulated depreciation (153,728) (1,186,473) (73,368) – (1,413,569)

Net book amount 305,283 2,117,936 34,518 35,469 2,493,206

Net book amount1 January, 2010 301,233 1,928,090 40,724 299,761 2,569,808Exchange rate adjustments 8,202 16,912 385 3,961 29,460Additions and transfers 8,290 316,856 6,727 (268,200) 63,673Discontinued operations (note 26) (486) (2,064) (72) – (2,622)Disposals and adjustments 130 (1,190) (25) (53) (1,138)Depreciation charge (12,086) (140,668) (13,221) – (165,975)

31 December, 2010 305,283 2,117,936 34,518 35,469 2,493,206

65



8. Property, plant and equipment (continued)

The net carrying value of assets held under finance leases within property, plant and equipment amounted to $7.1 million (2010: $9.0 million) as at 31 December, 2011. It is the Group’s policy to capitalise interest on borrowings specific to capital projects during the period of construction. No borrowing costs was capitalised in 2011 (2010: Nil).Included under plant and machinery is the Kiln 4 asset with a net book value of $147.6 million (net of impairment and write offs). This asset is not currently operating and its refurbishment and restart have been deferred in the Group projections. Consequently, in accordance with IAS 36, management has partially impaired the asset and recorded an impairment loss of $61.3 million in 2011. Additionally, part of the asset was considered obsolete resulting in the write off of $18.1 million (refer to note 3).

9. Goodwill

2011 2010 $ $

Cost 269,147 269,147Accumulated impairment (53,316) (53,316)

Net book amount 215,831 215,831

Net book amount

1 January 215,831 215,831Impairment charge for the year – –

31 December 215,831 215,831

Based on the results of impairment tests in 2011, no further impairment charge is required.

Impairment testing of goodwillGoodwill was acquired through business combinations with Caribbean Cement Company Limited and subsidiaries of Readymix (West Indies) Limited. The recoverable amount of business units has been determined using pre-tax cash flow projections approved by the Board of Directors and applying sensitivity analysis to the data.The recoverable amount of the cash generating units was determined using value in use calculations. The calculation of value in use is most sensitive to assumptions regarding market share, gross margins and discount rates:Market share - It is assumed that the respective business units will at least maintain their current levels of market

share on the local market over the projection period. Continued growth is projected on the local and export markets.

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ANNUAL REPORT 2011

9. Goodwill (continued)

Impairment testing of goodwill (continued)Gross margins – It is assumed that the business units will be able to at least maintain their current gross margins

over the projection period with the ability to adjust selling prices to compensate for increasing price of inputs which are reliably supplied.

Discount rates – Discount rates represents the current market assessment of the risks specific to each cash generating unit (CGU), regarding the time value of money and individual risks of the underlying assets. The discount rate calculation is derived from the weighted average cost of capital (WACC) of the relevant CGU.

The following highlights the goodwill and impairment information for each cash-generating unit:

Caribbean Cement Subsidiary of Readymix Company Limited (West Indies) LimitedCarrying amount of goodwill $214 million $1.8 millionBasis for recoverable amount Value in use Value in useDiscount rate 18.83% 10.5%Discount rate (extrapolation period) 18.83% 10.5%Cash flow projection term 5 years 5 yearsGrowth rate (extrapolation period) 1.5% 1%

10. Pension plans and other post-retirement benefits

2011 2010 $ $

The numbers below are extracted from information supplied by independent actuaries.

a) Pension plan assets and other post retirement obligations:

Pension plan assets 215,671 216,072

Other post retirement obligations:Retiree’s medical benefit obligations (20,102) (18,073)Service benefit obligations (1,507) (1,252)

Total post retirement obligations (21,609) (19,325)


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10. Pension plans and other post-retirement benefits (continued)

2011 2010 $ $

b) Amounts recognised in the statement of income in respect of pension costs:

Current service cost 21,509 22,296Past service cost 1,966 9,731Interest cost 38,680 42,560Expected return on plan assets (53,225) (59,261)Amortised net loss (115) 1,483Total, included in personnel remuneration and benefits (Note 3) 8,815 16,809

Actual return on plan assets 72,066 57,625

c) Movement in pension plan assets

Balance at 1 January 216,072 223,891Net pension expense for the year (8,815) (16,809)Contributions paid 8,414 8,990

Balance at 31 December 215,671 216,072

Net pension plan assetDefined benefit obligation (729,588) (619,642)Fair value of plan assets 829,816 762,731

Surplus 100,228 143,089Unrecognised actuarial loss 115,443 72,983

Net pension plan asset 215,671 216,072

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ANNUAL REPORT 2011



2011 2010 $ $

c) Movement in pension plan assets (continued)

Changes in the present value of the defined benefit obligation are as follows:Defined benefit obligation at 1 January (619,642) (578,712)Interest cost (38,680) (42,560)Current service cost (21,509) (22,296)Actuarial (gain)/loss (71,106) 16,167Benefits paid 28,345 23,751Members’ contribution (7,002) (7,385)Expense allowance 3,006 2,366Past service cost (1,966) (9,731)Exchange differences (1,034) (1,242)

Defined benefit obligation at 31 December (729,588) (619,642)

Fair value of plan assets at 1 January 762,731 709,594Expected return 53,225 59,261Actuarial gain 28,764 2,366Benefits paid (28,345) (23,751)Employer and employees’ contribution 15,416 16,375Expense allowance (2,051) (1,528)Exchange differences 76 414

Fair value of plan assets at 31 December 829,816 762,731

The Group expects to contribute $9.7 million to its defined benefit plan in 2012.

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2011 2010 $ $

c) Movement in pension plan assets (continued)Major categories of plan assets as a percentage of fair value:

Equities 41% 34%Debt securities 48% 46%Property 0% 0%Other securities 11% 20%

Experience history for the current and previous four periods are as follows:

2011 2010 2009 2008 2007 $ $ $ $ $

Defined benefit obligation (729,588) (619,642) (578,712) (534,627) (454,549)Fair value of plan assets 829,816 762,731 709,594 673,640 677,462Surplus 100,228 143,089 130,882 139,013 222,913Experience adjustments on plan liabilities (29,104) 16,167 8,917 (29,623) (9,124)Experience adjustments on plan assets 28,764 2,366 (25,182) (68,097) 8,343

The Trinidad Cement Limited Employees’ Pension Fund Plan, a defined benefit plan, is sectionalised for funding purposes into three segments to provide retirement pensions to the retirees of Trinidad Cement Limited (“TCL”), TCL Packaging Limited (“TPL”) and Readymix (West Indies) Limited (“RML”). Another pension plan, resident in Barbados, covers the employees of Arawak Cement Company Limited and Premix and Precast Concrete Incorporated. Employees of TCL Ponsa Manufacturing Limited are paid directly by the company, an end of service lump sum payment.The Parent Company’s employees and employees of TCL Packaging Limited and Readymix (West Indies) Limited are members of the Trinidad Cement Limited Employees’ Pension Fund Plan. This is a defined benefit Pension Plan which provides pensions related to employees’ length of service and basic earnings at retirement. The Plan’s financial funding position is assessed by means of triennial actuarial valuations carried out by an independent professional actuary. The last such valuation was carried out as at 31 December, 2009 and the results revealed that the Trinidad Cement Limited and Readymix (West Indies) Limited sections were in surplus by $165.3 million and $1.4 million respectively but the TCL Packaging Limited section was in deficit by $2.2 million.

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ANNUAL REPORT 2011



c) Movement in pension plan assets (continued)The service contribution rates for TCL, TPL and RML as a percentage of salaries will remain at 6%, 23.5% and 15.7% respectively.A roll-forward valuation in accordance with IAS 19 “Employee Benefits”, using assumptions indicated below, was done as at 31 December, 2011 for the sole purpose of preparing these financial statements.Employees of Arawak Cement Company Limited are members of a defined benefit pension plan, which became effective in September 1994. The plan is established under an irrevocable trust and its assets are invested through an independently administered segregated fund policy. The triennial actuarial valuation was last carried out as at January 2010 and showed a funding surplus of $9.2 million. The actuary has recommended that the company and employees fund the plan and future service benefits at 7% of members’ earnings.

Principal actuarial assumptions used are as follows: 2011 2010

Discount rate 5.5%–7.75% 6.25%–7.75%Expected return on plan assets 6.5%–7.75% 7.00% –7.75%Rate of future salary increases 2.5%–5.00% 2.5%–5.00%Rate of future pension increases 0.0%–3.75% 0.5%–4.25%

Caribbean Cement Company Limited operates a defined contribution Pension Plan for all permanent employees. This plan is managed by an independent party.

d) Other post-retirement benefits 2011 2010 $ $

The retirees’ medical/service benefit liabilities are derived as follows:Defined benefit obligation 40,580 27,148Unrecognised loss (18,971) (7,823)

21,609 19,325

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d) Other post-retirement benefits (continued) 2011 2010 $ $

Movement in the retirees’ medical/service benefit liabilities:Opening balance 19,325 16,166Total expense for the year 3,277 3,775Benefits paid (993) (616)

Retirees’ medical/service benefit liabilities 21,609 19,325

Changes in the present value of the benefit obligation are as follows:

Defined benefit obligation at 1 January (27,148) (26,680)Interest cost (1,665) (1,978)Current service cost (1,271) (1,274)Actuarial (gain)/loss (11,505) 2,162Benefits paid 1,009 622

Defined benefit obligation at 31 December (40,580) (27,148)

Expected benefits to be paid in 2012 will amount to $1.2 million.

Principal actuarial assumptions as at 31 December were: 2011 2010

Discount rate 5.5% 6.25%Medical expense inflation 5.0% 5.00%Rate of future salary increases 5.0% 5.00%

11. Inventories 2011 2010 $ $

Plant spares 173,319 177,781Raw materials and work in progress 204,682 210,191Consumables 115,474 116,801Finished goods 63,544 64,299

557,019 569,072Inventories are shown as net of provision of $9.3 million (2010: $7.2 million).

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ANNUAL REPORT 2011

12. Receivables and prepayments

2011 2010 $ $

Trade receivables 152,356 143,373Less: provision for doubtful debts (25,922) (24,959)

Trade receivables (net) 126,434 118,414Sundry receivables and prepayments 62,428 47,328Deferred expenditure 7,445 8,774Taxation recoverable 8,494 10,054

204,801 184,570

Included within trade receivables are balances due from two customers with agreed repayment terms over one year and therefore $10.9 million (2010: $9.2 million) is presented as a non-current asset.

As at 31 December, the aging analysis of trade receivables is as follows: Past due but not impaired Neither past Over Total due nor impaired 1-90 days 91-180days 180 days $ $ $ $ $

2011 126,434 46,422 49,404 5,484 25,1242010 118,414 40,923 36,126 6,867 34,498

As at 31 December, the impairment provision for trade receivables assessed to be doubtful was $25.9 million (2010: $24.9 million). Movements in the provision for impaired receivables were as follows:

2011 2010 $ $

At 1 January 24,959 23,310Charge for the year 3,827 7,591Unused amounts reversed/written off (2,864) (1,481)

25,922 29,420Discontinued operations – (4,461)

At 31 December 25,922 24,959


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13. Cash at bank and on hand

Cash at bank earns interest at floating rates based on daily bank deposit rates.

14. Bank overdraft and advances

2011 2010 $ $

Bankers’ acceptances and other advances – –Bank overdrafts 447 123

447 123

The overdraft facility attracts interest at a rate of 8.25% at 31 December, 2011 (2010: 8.25%). The outstanding balances on other overdraft and bank advances have been rolled into the Group debt that is being restructured (See Note 16) as the respective lenders have withdrawn these lines of credit.

15. Payables and accruals

2011 2010 $ $

Sundry payables and accruals 285,806 278,456Interest and other finance charges 231,840 28,526Trade payables 184,399 118,522Statutory obligations – Jamaica Subsidiary 7,790 4,750Taxation payable 4,967 3,585

714,802 433,839

Interest and other finance charges represent the unpaid interest and other relevant charges outstanding on the borrowings subject to restructuring. Under the terms of the revised debt restructure currently being finalised with the Group’s lenders, these liabilities will be added on to the revised principal amount of borrowings that will be repayable.

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ANNUAL REPORT 2011

16. Borrowings

2011 2010 $ $

Maturity of borrowings:

Borrowings subject to restructuring (current) 1,672,690 1,661,387Borrowings not subject to restructuring: One year 2,750 4,501Two years 1,104 3,239Three years 1,024 2,908Four years 778 1,851Five years and over 17 523

Gross borrowings 1,678,363 1,674,409Current portion of total borrowings (1,675,440) (1,665,888)

Borrowings not subject to restructuring (non-current portion) 2,923 8,521

At year end the Group is in default of its loan agreements. Therefore as required by IAS 1 “Presentation of Financial Statements” all loan balances in default have been classified as current liabilities to reflect the fact that the loans are callable on demand as a result of the breach as described in Note 27. The non-current portion represents loans and finance leases which are not under any defaulted agreements.

2011 2010 $ $

Type of borrowings:Bonds 783,043 782,454Term loans 488,916 454,031Finance lease obligations 5,285 6,453Other bank loans 401,119 431,471

1,678,363 1,674,409Currency denomination of borrowings

US dollar 627,636 592,843Local currencies 1,050,727 1,081,566

1,678,363 1,674,409Interest rate profile

Fixed rates 1,350,600 1,381,141Floating rates 327,763 293,268

1,678,363 1,674,409

2011 2010

The weighted average effective interest rate for borrowings is: 10.5% 8.5%


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16. Borrowings (continued)

a) Bonds(i) Barbados $50 million Bond This bond, with current book value of TT$106.9 million (2010: TT$107.9 million), is secured by a charge

on the fixed and floating assets of Arawak Cement Company Limited and carries rates of interest in the range 7.4% to 9.45% for the four tranches.

(ii) TT$346.5 million Bond This bond, with current book value of TT$138.1 million (2010: TT$137.8 million), is secured by a charge

on the fixed and floating assets of Trinidad Cement Limited and carries a fixed rate of interest of 6.87% per annum.

(iii) TT$187 million Bond This bond, with current book value of TT$164.9 million (2010: TT$164.4 million) is secured by a charge

on the fixed and floating assets of Trinidad Cement Limited and carries a fixed rate of interest of 8.95% per annum.

(iv) TT$100 million Bond This bond, with current book value of TT$74.4 million (2010: TT$74.3 million), is secured by a charge on

the fixed and floating assets of the Group and carries a fixed interest rate of 8.5% per annum.

(v) TT$315 million Project Bond This bond, with current book value of TT$298.7 million (2010: TT$298.1 million), is secured by a charge

on certain fixed assets of the Group and carries a fixed rate of interest of 9.1% per annum.

b) Term loans(i) US$25 million Project ‘A’ Loan This loan, with current book value of TT$114.2 million (2010: TT$113.9 million), is secured by a charge

on certain fixed and floating assets of the Group and carries a floating rate of interest of 6-month Libor plus 225 basis points.

(ii) US$10 million Project ‘C’ Loan This loan, with current book value of TT$63.4 million (2010: TT$63.1 million), is secured by a charge on

certain fixed and floating assets of the Group and carries a floating rate of interest of 6-month Libor plus 100 basis points.

In addition to interest, the lender is entitled to an additional annual margin to be paid from April 2009 to the end of the loan capped at 800 basis points above Libor calculated on the excess Earnings before Interest, Taxes, Depreciation and Amortisation (‘EBITDA’) of Caribbean Cement Company Limited over US$20.0 million.

(iii) US$20 million Project ‘Parallel’ Loan This loan, with current book value of TT$110.2 million (2010: TT$109.8 million), is secured by a charge

on certain fixed and floating assets of the Group and carries a floating rate of interest of 6-month Libor plus 275 basis points.

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ANNUAL REPORT 2011


b) Term loans (continued)(iv) Interest Rate Swap The interest rate swap agreements were terminated on 13 April, 2011 and the obligation at that time of

$33.8 million (2010: $33.3 million) was converted into a loan. The new loan will be secured by the assets of the TCL Group whilst interest will be applied at the rate of six-month Libor plus 2.25%.

(v) US$25 million commercial paper The loan with current book value of TT$160.8 million (2010: TT$160.1 million), is unsecured and carries

a fixed rate of interest of 7.25% per annum.

(vi) TT$18.5 million loan This loan with a current book value of $5.8 million (2010: $6.5 million), is secured by a charge on the

fixed and floating assets of Readymix (West Indies) Limited and carries a floating rate of interest.

(vii) Other term loans Loans obtained by the Jamaica subsidiary with current book value of TT$0.4 million (2010: TT$0.6

million) are secured by a bill of sale over certain of the subsidiary’s motor vehicles and carries interest with rates ranging from 20.0%-21.75% per annum.

c) Other bank loans $401.1 millionThese loans represent overdraft and short term loans which have now been included as part of the overall Group’s debt to be restructured. The loans are generally unsecured and are denominated in Trinidad and Tobago, Barbados, Jamaican and United States dollars and carry interest with rates ranging from 5.25% to 24.5%.

d) RestructuringThe terms of the borrowings as described in a) to c) above reflect the terms under the existing loan agreements with the lenders.As discussed further in Note 27, the Group has agreed in principle with its lenders the terms on which its debt portfolio will be restructured. Most of the existing short-term and long-term debt will be repaid over the period from March 2013 to December 2018. Interest payments will recommence from December 2012 and will include an additional 200 basis points on existing rates with a floor on Libor and Base Rates of 4%. The TCL Group will be required to comply with certain financial covenants and expenditure limits. The currently unsecured debt will be secured by a pledge of additional assets of the TCL Group. An additional 200 basis points on existing interest rates have been recorded from January 2011 in accordance with the terms of the debt restructuring agreed in principle with lenders.


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e) Finance leases (not subject to restructuring)Included in total borrowings are finance leases amounting to $5.3 million (2010: $6.4 million). The minimum lease payments under these finance leases are as follows:

2011 2010 $ $

Due not more than one year 2,731 3,171Due in years two to five 3,380 4,403

Total minimum lease payments 6,111 7,574Less: Finance charges (826) (1,121) Total net present value 5,285 6,453

17. Stated capital and other reserves

(a) Stated capitalAuthorisedAn unlimited number of ordinary and preferenceshares of no par value

Issued and fully paid249,765,136 (2010: 249,765,136) ordinary sharesof no par value 466,206 466,206

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ANNUAL REPORT 2011

17. Stated capital and other reserves (continued)

(b) Other reserves Foreign currency Total translation Hedging other account reserve reserves $ $ $Year ended 31 December, 2011

Balance at 1 January, 2011 (179,595) (22,984) (202,579)Other comprehensive income:Currency translation and other adjustments (474) – (474)Net charge on swap transferred to – 4,195 4,195 statement of income (interest)Net charge on swap transferred to – 26,450 26,450 statement of income (restructuring)Deferred taxation on swap obligation – (7,661) (7,661)

Total other comprehensive income (474) 22,984 22,510

Balance at 31 December, 2011 (180,069) – (180,069)

Year ended 31 December, 2010

Balance at 1 January, 2010 (197,048) (18,899) (215,947)Other comprehensive income:Currency translation and other adjustments 17,453 – 17,453Change in fair value of swap obligation – (18,797) (18,797)Net charge on swap transferred to statement of income – 13,381 13,381Deferred taxation on swap obligation – 1,331 1,331

Total other comprehensive income 17,453 (4,085) 13,368

Balance at 31 December, 2010 (179,595) (22,984) (202,579)


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17. Stated capital and other reserves (continued)

(b) Other reserves (continued)Nature and purpose of reservesForeigncurrencytranslationaccount

This reserve records exchange differences arising from the translation of the financial statements of foreign subsidiaries.

Hedgingreserve

This account records the effective portion of the cashflow hedge relating to future periods.

18. Dividends

During the year, the Parent company wrote back an amount of $0.2 million (2010: $0.3 million) to retained earnings representing dividend cheques which were not presented for payment for more than six years.

19. Employee share ownership plan (ESOP) 2011 2010 $ $

Employeeshareownershipplan

Number of shares held - unallocated (thousands) 3,752 4,121

Number of shares held - allocated (thousands) 3,953 3,584

7,705 7,705

Fair value of shares held - unallocated 6,716 11,951Fair value of shares held - allocated 7,076 10,394

13,792 22,345

Cost of unallocated ESOP shares 25,299 28,658

Charge to earnings for shares allocated to employees 500 663

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ANNUAL REPORT 2011

19. Employee share ownership plan (ESOP) (continued)

The Parent Company operates an Employee Share Ownership Plan (ESOP) to give effect to a contractual obligation to pay profit sharing bonuses to employees via shares of the Parent Company based on a set formula. Employees may acquire additional company shares to be held in trust by the Trustees but the costs of such purchases are for the employee’s account. All employees of the Parent Company and certain subsidiaries are eligible to participate in the Plan which is directed, including the voting of shares, by a Management Committee comprising management of the Parent Company and the general membership. Independent Trustees are engaged to hold in trust all shares in the Plan as well as to carry out the necessary administrative functions.Shares acquired by the ESOP are funded by Group contributions. The cost of shares so acquired of $25.3 million (2010: $28.7 million) which remain unallocated to employees have been recognised in shareholders’ equity under ‘Unallocated ESOP Shares’. All dealings in these shares will be recognised directly in equity. The fair value of shares was derived from the closing market price prevailing on the Trinidad and Tobago Stock Exchange at year end.

20. Capital commitments and contingent liabilities

Capital commitmentsThe Group has approved no contractual capital commitments as at December 2011 (2010-NIL).

Contingent liabilitiesThere are contingent liabilities amounting to $22.5 million (2010: $16.3 million) for various claims, assessments, bank guarantees, and bonds against the Group. Included therein, are several pending legal actions and other claims in which the Group is involved. It is the opinion of the directors, based on the information provided by the Group’s attorneys at law, that if any liability should arise out of these claims it is not likely to be material. Accordingly, no provision has been made in these financial statements in respect of these matters.


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21. Cash from operations

2011 2010 $ $

Loss before taxation continuing operations (457,252) (145,338)Profit/(loss) before taxation discontinued operations 9,411 (4,253)

Loss before taxation (447,841) (149,591)

Adjustments to reconcile (loss)/profit before taxation to net cash generated by operating activities:Depreciation 170,979 165,975Impairment charges and write offs 79,386 –Interest expense net of interest income 187,960 151,335Restructuring expenses 103,201 –ESOP share allocation and sale of shares net of dividends 3,385 24Other post-retirement benefit expense 3,277 3,775Pension plan expense 8,815 16,809Loss/(gain) on disposal of property, plant and equipment 3,429 (7,084)Gain from disposal of subsidiary (11,092) –Other non-cash items 3,907 325

105,406 181,568Changes in net current assetsDecrease/(increase) in inventories 12,053 (1,929)(Increase)/decrease in receivables and prepayments (22,966) 9,941Increase/(decrease) in payables and accruals 65,947 22,910

160,440 212,490

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ANNUAL REPORT 2011

22. Fair value and fair value hierarchies

The fair values of cash at bank and on hand, receivables, payables and borrowings approximate their carrying amounts due to the short term and/or callable nature of these instruments. The fair values of these instruments and long term borrowings are presented below:

Carrying Fair Carrying Fair amount value amount value 2011 2011 2010 2010 $ $ $ $Financial assets: Cash at bank 57,755 57,755 20,416 20,416Trade receivables 126,434 126,434 118,414 118,414

Financial liabilities: Bank overdraft and advances 447 447 123 123Borrowings and swap 1,678,363 1,678,363 1,674,409 1,674,409Trade payables 184,399 184,399 118,522 118,522Interest and finance charges 231,841 231,840 28,526 28,526


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22. Fair value and fair value hierarchies (continued)

Determination of fair value and fair value hierarchiesThe Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:

Level 1

Included in the Level 1 category are financial assets and liabilities that are measured in whole or in part by reference to published quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

Level 2

Included in the Level 2 category are financial assets and liabilities that are measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions and for which pricing is obtained via pricing services, but where prices have not been determined in an active market. This includes financial assets with fair values based on broker quotes and investments in private equity funds with fair values obtained via fund managers.

Level 3

Included in the Level 3 category are financial assets and liabilities that are not quoted as there are no active markets to determine a price. These financial instruments are held at cost, being the fair value of the consideration paid for the acquisition of the investment, and are regularly assessed for impairment.As at 31 December, 2011 there were no financial assets in Levels 1, 2 or 3. The interest rate swap which was terminated during the year was previously classified as a Level 2 financial instrument.

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ANNUAL REPORT 2011

23. Subsidiary undertakings

The Group’s subsidiaries are as follows: Country of incorporation Ownership level 2011 2010

Readymix (West Indies) Limited Trinidad and Tobago 71% 71%TCL Packaging Limited Trinidad and Tobago 80% 80%TCL Ponsa Manufacturing Limited Trinidad and Tobago 65% 65%TCL Leasing Limited Trinidad and Tobago 100% 100%Caribbean Cement Company Limited Jamaica 74% 74%Jamaica Gypsum and Quarries Limited Jamaica 74% 74%Rockfort Mineral Bath Complex Limited Jamaica 74% 74%Caribbean Gypsum Company Limited Jamaica 74% 74%Arawak Cement Company Limited Barbados 100% 100%Premix & Precast Concrete Incorporated Barbados 43% 43%TCL Trading Limited Anguilla 100% 100%TCL Service Limited Nevis 100% 100%TCL (Nevis) Limited Nevis 100% 100%Island Concrete Products N.V. St. Maarten - 71%Island Concrete SARL St. Martin - 71%TCL Guyana Inc. Guyana 80% 80%

The Group’s effective interest in Premix & Precast Concrete Incorporated is 43% but this company has been treated as a consolidated subsidiary since the Group effectively has control to govern the financial and operating policies of the company. During the year the Group disposed of its interest in Island Concrete Products N.V. and Island Concrete SARL.

KeymanagementcompensationoftheGroup

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group.

2011 2010 $ $

Short-term employment benefits 24,331 29,098Pension plan and post retirement benefits 653 689


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24. Financial risk management

IntroductionThe Group activities expose it to a variety of financial risks, including the effects of changes in debt prices, interest rates, market liquidity conditions, and foreign currency exchange rates which are accentuated by the Group’s foreign operations, the earnings of which are denominated in foreign currencies. Accordingly, the Group’s financial performance and position are subject to changes in the financial markets. Overall risk management measures are focused on minimising the potential adverse effects on the financial performance of the Group of changes in financial markets and to this end the Group may employ various hedging strategies. Where financial risks cannot be fully hedged, the Group remains so exposed with respect to its financial performance and position.

Risk management structureThe Board of Directors is responsible for the overall risk management approach and for approving the risk strategies, principles and policies and procedures. Day to day adherence to risk principles is carried out by the executive management of the Group in compliance with the policies approved by the Board of Directors.

Credit riskCredit risk is the risk that a counter-party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risks from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.Significant changes in the economy, or in the state of a particular industry segment that represents a concentration in the Group’s portfolio, could result in losses that are different from those provided at the statement of financial position date. Management therefore carefully manages its exposure to credit risk.The Group structures the level of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one customer, or group of customers, and to geographical and industry segments. Such risks are monitored on an ongoing basis, and limits on the levels of credit risk that the Group can engage in are approved by the Board of Directors.Exposure to credit risk is further managed through regular analysis of the ability of debtors and financial institutions to settle outstanding balances, meet capital and interest repayment obligations and by changing these lending limits when appropriate. The Group does not generally hold collateral as security.

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ANNUAL REPORT 2011

24. Financial risk management (continued)

Credit risk (continued)The following table shows the maximum exposure to credit risk for the components of the statement of financial position:

Gross Gross maximum maximum exposure 2011 exposure 2010 $ $

Trade receivables 126,434 118,414Cash at bank 57,755 20,416

Credit risk exposure 184,189 138,830

Creditriskrelatedtoreceivables

Customer credit risk is managed in accordance with the Group’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. At 31 December, 2011, the Group had thirteen customers (2010: thirteen customers) that owed the Group more than $2 million each and which accounted for 40% (2010: 47%) of all trade receivables owing.

Creditriskrelatedtocashatbank

Credit risks from balances with banks and financial institutions are managed in accordance with Group policy. Investments of surplus funds are made only with approved counterparties and within limits assigned to each counterparty. Counterparty limits are reviewed by the Group’s Board of Directors on an annual basis. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through potential counterparty failure.

Liquidity riskThe Group monitors its risk to a shortage of funds by considering planned and probable expenditures against projected cash inflows from operations, from the settlement of financial assets such as accounts receivables and levels of cash sales. The Group’s objective is to fund its operations and activities within the framework of the terms of the debt restructuring agreed with lenders. Working credit lines have been withdrawn and access to longer term credit funding has been severely restricted. Accordingly, the Group is dependent on internally generated funds to cover most of its funding needs.


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Liquidity risk (continued)The table below summaries the maturity profile of the Group’s financial liabilities at 31 December:

2011 On demand 1 year 2 to 5 years > 5 years Total $ $ $ $ $

Bank overdraft and advances 447 – – – 447Borrowings 1,672,690 2,750 2,906 17 1,678,363Interest and finance charges 231,840 – – – 231,840Trade payables – 184,399 – – 184,399

1,904,977 187,149 2,906 17 2,095,049

2010

Bank overdraft and advances 123 – – – 123Borrowings 1,661,387 4,501 7,998 523 1,674,409Interest and finance charges 28,526 – – – 28,526Trade payables – 118,522 – – 118,522

1,690,036 123,023 7,998 523 1,821,580

Capital managementThe primary objective of the Group’s capital management is to ensure that it maintains a healthy financial position in order to support its business activities and maximise shareholder value. The Group is required to comply with several financial ratios and other quantitative targets in accordance with loan agreements. The Group will be required to achieve Leverage, Debt Service and Net Worth financial ratio targets in accordance with the revised terms of the debt restructuring agreed with lenders.

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ANNUAL REPORT 2011



Foreign currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency. Management monitors its exposure to foreign currency fluctuations and employs appropriate strategies to mitigate any potential losses. Risk management in this area is active to the extent that hedging strategies are available and cost effective.

Foreign currency riskThe following table demonstrates the sensitivity to a reasonably possible change in the exchange rates, with all other variables held constant, of profit before tax (due to changes in the fair value of monetary assets and liabilities) and the Group’s equity:

Increase/decrease Effect on Effect on in US/Euro rate profit before tax equity $ $

2011US dollar +1% (6,013) (4,510) -1% 6,013 4,510

Euro +1% (87) (65) -1% 87 65

2010US dollar +1% (6,100) (4,575) -1% 6,100 4,575

Euro +1% (91) (68) -1% 91 68

The effect on profit is shown net of US dollar financial assets (2011: $70.2 million, 2010: $53.3 million), and liabilities (2011: $671.5 million, 2010: $663.3 million) and EURO net financial liabilities (2011: $8.7 million, 2010: $9.1 million).

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Foreign currency risk (continued)The aggregate value of financial assets and liabilities by reporting currency are as follows:

2011 TTD USD JMD BDS Other Total $ $ $ $ $ $ASSETS Cash at bank 22,940 20,748 10,268 98 3,701 57,755Trade receivables 45,237 49,430 17,449 2,729 11,589 126,434

68,177 70,178 27,717 2,827 15,290 184,189LIABILITIES Bank overdraft and advances – – – 447 – 447Borrowings 867,716 627,636 39,799 143,212 – 1,678,363Interest and finance charges 160,902 70,838 – – 100 231,840Trade payables 24,140 43,811 80,366 24,526 11,556 184,399

1,052,758 742,285 120,165 168,185 11,656 2,095,049

NET LIABILITIES (984,581) (672,107) (92,448) (165,358) 3,634 (1,910,860)

2010

ASSETS Cash and short-term deposits 823 12,319 5,935 – 1,339 20,416Trade receivables 48,485 40,991 15,935 4,762 8,241 118,414

49,308 53,310 21,870 4,762 9,580 138,830LIABILITIES Bank overdraft and advances – – – 123 – 123Borrowings and swap obligation 870,731 631,086 59,284 146,657 – 1,707,758Interest and finance charges 22,978 5,548 – – – 28,526Trade payables 32,110 32,254 23,412 21,518 9,235 118,529

925,819 668,888 82,696 168,298 9,235 1,854,936

NET LIABILITIES (876,511) (615,578) (60,826) (163,536) 345 (1,716,106)

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ANNUAL REPORT 2011



Interest rate riskInterest rate risk for the Group centers on the risk that debt service cash outflow will increase due to changes in market interest rates. At the statement of financial position date, the Group’s exposure to changes in interest rate relates primarily to bank loans which has a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed, variable rate debt and financial derivatives.

The interest rate exposure of borrowings is as follows: 2011 2010 $ $

At fixed rate 1,350,600 1,381,141At floating rates 327,763 293,268

Interest rate risk tableThe following table shows the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s profit before tax:

Increase/decrease Effect on in basis points profit before tax $

2011 +100 (3,278) -100 3,278

2010 +100 (2,933) -100 2,933

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25. Financial information by segment

The Group is organised and managed on the basis of the main product lines provided which are cement, concrete and packaging. Management records and monitors the operating results of each of the business units separately for the purpose of making decisions about resource allocations and performance assessment. Transfer pricing between operating segments is on an arm’s length basis.

25.1 Operating segment information Consolidation

2011 Cement Concrete Packaging adjustments Total $ $ $ $ $

Total revenue 1,691,382 116,242 91,036 – 1,898,660

Inter-segment revenue (257,287) – (80,513) – (337,800)

Third party revenue 1,434,095 116,242 10,523 – 1,560,860

Depreciation and impairment 245,367 8,543 2,159 (5,704) 250,365

(Loss)/profit before tax (502,869) (425) 8,901 46,552 (447,841)

Segment assets 4,562,639 162,144 114,463 (886,201) 3,953,045

Segment liabilities 3,406,799 60,825 36,365 (719,075) 2,784,914

Capital expenditure 38,484 1,856 381 – 40,721

2010

Total revenue 1,677,203 138,525 89,387 – 1,905,115

Inter-segment revenue (265,211) – (78,820) – (344,031)

Third party revenue 1,411,992 138,525 10,567 – 1,561,084

Depreciation 159,930 9,211 2,262 (5,428) 165,975

(Loss)/profit before tax (158,129) (7,669) 10,764 5,443 (149,591)

Segment assets 4,563,411 165,812 118,494 (726,796) 4,120,921

Segment liabilities 2,996,377 65,581 47,594 (505,943) 2,603,609

Capital expenditure 57,478 5,518 677 – 63,673

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ANNUAL REPORT 2011


25. Financial information by segment (continued)

25.2. Geographical segment information Additions Additions Non- Non- property property current current plant and plant and Revenue Revenue assets assets equipment equipment 2011 2010 2011 2010 2011 2010 $ $ $ $ $ $

Trinidad and Tobago 527,131 567,733 2,151,947 2,279,887 27,297 29,505

Jamaica 499,111 492,513 585,774 638,653 7,339 26,807

Barbados 169,107 161,271 355,122 380,058 6,010 7,319

Other countries 365,511 339,567 51,540 54,290 75 42

Group total 1,560,860 1,561,084 3,144,383 3,352,888 40,721 63,673

The revenue information above represents third party revenue based on the location of the customers’ operations.

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26. Assets classified as held for sale

The operations of two of the Group’s subsidiaries namely Island Concrete Products N.V. and Island Concrete SARL located in St.Maarten and St Martin respectively, were suspended effective 1 December, 2009 and subsequently disposed in 2011, due to a major decline in the demand for concrete on the island.As at 31 December, 2010, the subsidiaries were classified as a disposal group held for sale and as a discontinued operation. The net assets and results of the subsidiary for the years ended 31 December, 2011 and 2010 are presented below:

2011 2010 $ $

Revenue – 1,020Expenses (1,681) (5,179)

Operating loss (1,681) (4,159)Finance costs – (94)

Loss before tax from discontinued operations (1,681) (4,253)Taxation – –

Loss for the year from discontinued operations (1,681) (4,253)

The major classes of assets and liabilities of Island Concrete Products N.V. and Island Concrete SARL classified as held for sale as at 31 December, 2011 are as follows:

2011 2010 $ $

Assets

Property, plant and equipment (Note 8) – 2,622Inventories – 539Cash and short term deposits – 17

Assets classified as held for sale – 3,178

Liabilities

Payables and accruals – (3,238)Bank overdraft – (969)

Liabilities associated with assets classified as held for sale – (4,207)

Net liabilities directly associated with disposal group – (1,029)

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ANNUAL REPORT 2011


26. Assets classified as held for sale (continued)

The net cash flows incurred by Island Concrete Products N.V. and Island Concrete SARL for the year ended 31 December, 2011 are as follows:

2011 2010 $ $

Operating – (356)Investing – –Financing – –

Net cash outflow – (356)

27. Debt restructuring and going concern

Debtrestructuring

In 2010 Trinidad Cement Limited (TCL) Group commenced negotiations with its lenders for the restructuring of its debt portfolio. On 14 January, 2011, TCL declared a moratorium on debt service payments by all entities in the Group and thereafter debt service payments falling due have not been made by TCL and its subsidiaries.Debt agreements covering loans amounting to $1,673 million as at 31 December, 2011 are therefore in default. However, lenders have not sought to enforce their security and legal rights, which remain unchanged whilst negotiations are taking place with the Group. By 31 December, 2011, the Group and its lenders had reached agreement in principle on the features of the restructuring and its key terms. The legal agreements to give effect to the debt restructuring are being drafted and execution of them and closure is expected in April 2012.It was agreed in principle that the Readymix (West Indies) Limited (RML) Group and TCL Packaging Limited (TPL) will be excluded from the global TCL Group’s restructuring. As a consequence, RML Group and TPL are separately proposing to their lenders that the arrears of principal and interest on all borrowings be settled over a period of several months in 2012 and thereafter payments revert to the original schedule and the former overdraft and short term bank advances be converted to medium term loans. Notwithstanding the Group’s agreement in principle on terms with the lenders, the new agreements have not been given legal force at year end. Pending execution of agreements on the restructuring, the lenders could enforce their security and legal rights to demand immediate repayment of all outstanding obligations which the Group is not in a position to meet. Should the lenders execute their legal rights to enforce security there may be a risk to the going concern of the TCL Group.

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27. Debt restructuring and going concern (continued)

Goingconcern

The current economic environment is challenging and as a result the Group has reported an operating loss of $166 million for the year ended 31 December, 2011. At that date, the current liabilities exceeded current assets by $1.58 billion, mainly due to the reclassification of the borrowings to current liabilities as described in note 16.Also as noted above, the successful restructuring of the Group’s borrowings is expected to be completed by April 2012. Management’s projections of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) currently supports the repayment of its future debt obligations based on the revised terms of the restructuring. The Group is aggressively pursuing new markets and additional market share in existing markets. For 2011, demand in the critical local markets of Trinidad and Tobago, Jamaica and Barbados stabilised and modest growth in volumes is projected for 2012. To counter rising input costs, particularly, energy and raw materials, the Group has increased its selling prices by up to 9% in most of its markets in January 2012. The Group also continues to implement cost reduction initiatives. The Group is also currently in negotiations with a potential new customer for the supply of product over a three year period. This contract if secured, would make a significant contribution to the profitability and liquidity of the Group. The key risk to the Group’s sustainability is a return to declining domestic markets as well as continued increases in key input costs including raw materials and energy. The ability of the Group to meet its debt service obligations on a sustained basis is sensitive to the key assumptions around market growth, market share, costs and other such assumptions in management’s forecast. The directors have concluded that the combination of the above circumstances represent a material uncertainty that may impact the ability of the Group to continue as a going concern. Nevertheless, based on current plans and strategies being pursued, including the anticipated successful completion of the debt restructure exercise, the directors have a reasonable expectation that the Group will generate adequate cash flows and profitability which would allow the Group to continue in operational existence in the foreseeable future. On this basis, the Directors have maintained the going concern assumption in the preparation of these financial statements.

28. Events after the reporting date

Strikeactiontakenbyemployees

On 27 February, 2012 strike action was initiated by the employees of the Parent Company (Trinidad Cement Limited) and its subsidiary, TCL Packaging Limited, located on the same compound. As at 12 April, 2012 this strike action had progressed unresolved for 46 days and has disrupted the operations of both companies. As a result of these events cement production at these companies have been significantly curtailed and Trinidad Cement Limited has not been able to export cement since 27 February, 2012.However, other subsidiaries in the Group namely Caribbean Cement Company Limited and Arawak Cement Company Limited have been exporting cement into Trinidad as well as the other markets served by the Trinidad plant in an effort to satisfy cement demand. Securityonborrowings

Subsequent to year end the Board of Directors of Trinidad Cement Limited approved the recommendation of management for the Group to pledge additional assets as security for certain borrowings in accordance with the terms of the debt restructuring exercise.

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ANNUAL REPORT 2011

Design & Artwork: Paria Publishing Co. Ltd.Photographs of Directors & Managers: Abigail HadeedPrinting: Scrip J

Notes

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